Fortnightly - MISOhttp://www.fortnightly.com/tags/miso
enRegulatory Rounduphttp://www.fortnightly.com/fortnightly/2004/12/regulatory-roundup
<div class="field field-name-field-import-byline field-type-text-long field-label-inline clearfix"><div class="field-label">Byline:&nbsp;</div><div class="field-items"><div class="field-item even"><p>Bruce Radford</p>
</div></div></div><div class="field field-name-field-import-bio field-type-text-long field-label-inline clearfix"><div class="field-label">Author Bio:&nbsp;</div><div class="field-items"><div class="field-item even"><p><strong>Bruce W. Radford</strong> is editor in chief of <em>Public Utilities Fortnightly</em>.</p>
</div></div></div><div class="field field-name-field-import-volume field-type-node-reference field-label-inline clearfix"><div class="field-label">Magazine Volume:&nbsp;</div><div class="field-items"><div class="field-item even">Fortnightly Magazine - December 2004</div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><p><b>Path 15 Upgrade. </b>California ISO (Cal-ISO) runs into opposition with its unprecedented plan in Tariff Amendment 63 to make the Western Area Power Administration (WAPA) a "partial" participating transmission owner in the ISO, in trade for WAPA's 10 percent capacity interest (150 MW) in the Path 15 upgrade. Utilities complain that WAPA will receive a 10 percent share of FTRs and congestion revenues, though PG&amp;E and TransElect will have paid for 99.5 percent of the line construction costs. <i>FERC Dkt. Nos. EL04-133, ER04-1198, protests filed Sept. 29, 2004.</i></p>
<p><b>Gas Bypass Pipelines.</b> Oregon appeals court reverses a state public utility commission (PUC) order, says a group of industrial gas users would violate state law providing for exclusive utility franchise rights if it forms a cooperative to bypass the local gas distribution utility and construct a pipeline to deliver gas to its members at retail. <i>NW Nat Gas Co. v. Or. PUC, Nos. 01C-18514, Oct. 13, 2004</i><i>.</i></p>
<p><b>Power Line Communications.</b> Federal Communications Commission (FCC) OKs new rules for BPL (Broadband Over Power Line) systems to create a competitive regulatory framework for the use of existing electric utility lines to provide high-speed communications. <i>ET Dkt. Nos. 04-36, 03-104, Oct. 14, 2004.</i></p>
<p><b>Gen Station Power Needs.</b> Duke Energy said it could support Cal-ISO's claim that it was "stretched thin," and wanted first to gather and study data from power producers before investing money to change its billing and metering protocols and software on netting of on-site station power against unit output. Duke had complained to FERC to force Cal-ISO to conform to FERC precedent to permit its Moss Landing units to net their draws of station power against output from any other unit under common ownership, even if not operating instantaneously, and even if the two units are not directly interconnected. <i>FERC Dkt. No. EL04-130, reply filed Oct. 7, 2004.</i></p>
<p><b>ISO Retail Service. </b>The Maine PUC said it would not require the New England Power Pool (NEPOOL) or ISO New England (ISO-NE) to obtain a utility license to serve an individual consumer (MPEU, or "Market Participant End User") with generation supply taken directly from the New England regional wholesale market. But a private power producer, trader or affiliate who facilitates the deal would require a license as a competitive retail energy provider. <i>Morin Brick Co., Dkt. No. 2004-345, Aug. 27, 2004.</i></p>
<p><b>Renewable Energy Portfolios. </b>California appeals court overturns state PUC order that required electric utilities to pay costs upfront for upgrading regional power grid to accommodate sources of renewable energy to comply with a state law passed in 2002 that mandates a one-percent-per-year increase in renewable energy portfolios maintained by public utilities. <i>So.Cal.Ed. v. CPUC, Cal.App.2d Dist., No. B171050, Aug. 31, 2004.</i></p>
<p><b>Gas Supply Risk. </b>Regulators in Virginia were checking whether to allow Washington Gas Light to reclaim gas customers that had chosen competitive retail service from Metromedia Energy Inc. or to demand a larger security deposit from MME, to cover risk from higher futures prices and MME's increased share of the utility's design-day load.<i> Va.S.C.C. Case No. PUE-2003-00536.</i></p>
<p><b>Fuel Cost Hedging.</b> Georgia PSC rules that Savannah Elec. &amp; Power no longer needs any special financial incentive to operate its fuel cost hedging program, decides to flow fuel cost savings from hedging activities to ratepayers, ending prior practice of sharing 25% of such gains with company shareholders. <i>Dkt. No. 19042-U, Oct. 19, 2004.</i></p>
<p><b>Utility Supply Solicitations. </b>Ohio PUC OK's bidding process for FirstEnergy subsidiary Ohio Edison to solicit offers from power producers for energy supply, to assemble standard-offer portfolios for default retail customers. PUC appoints Charles River Associates to help analyze bids. No single bidder can win right to supply more than 65 percent of utility load. <i>Cause No. 04-1371-<br />EL-ATA, Oct. 6, 2004.</i></p>
<p><b>Provider of Last Resort (POLR).</b> The Pennsylvania PUC OK's three-year term with fixed prices for a POLR tariff for Duquesne Light, citing as irrelevant the utility's claim that it needed a six-year term to cut risk to help its unregulated affiliate buy the Sunbury plant. <i>Case No. P-00032071, Oct. 5, 2004.</i></p>
<p><b>Coal Seam Gas.</b> Utah Public Service Commission (PSC) orders Questar Gas to refund some $25 million collected from customers to cover the cost of processing coal-seam gas produced near Price, Utah, saying that the gas was incompatible with appliances and posed a danger to retail customers. <i>Dkt. Nos. 03-057-057 et al., Aug. 30, 2004.</i></p>
<p><b>Deceptive Marketing Practices.</b> Illinois Commerce Commission rules that private natural gas retailer Peoples Energy Services Corp. violated state law by inviting customers to lock in a fixed price (62 cents per therm) for more than a year, while reserving the right at any time to send a "pricing notice" to customers with a new higher rate that would be binding absent the customer's written objection within days. <i>Case No. 03-0592, July 21, 2004.</i></p>
<p><b>Renewable Portfolio Standards. </b>New Jersey BPU ok's a financing arrangement with the PJM RTO to develop and implement a Generator Attributes Tracking System (GATS) to identify qualifying resources and verify compliance with state programs to promote renewable energy.</p>
<p><b>Retail Electric Competition. </b>Citing significant market power in wholesale power supply, plus a dearth of alternative retail electric vendors, utility regulators in Virginia in a report to the governor (Sept. 1, 2004) questioned whether retail electric competition can bring lower power prices to consumers than would have been the case under traditional regulation.</p>
<p><b>Promotional Utility Advertising.</b> The Maine PUC dismissed a customer complaint that Central Maine Power's campaign of promoting the use of electric-consuming appliances violated the public interest by increasing environmental degradation and domestic dependence on foreign oil. <i>Dkt. No. 2004-481, Sept. 18, 2004.</i></p>
</div></div></div><div class="field field-name-field-article-category field-type-taxonomy-term-reference field-label-above clearfix"><h3 class="field-label">Category (Actual): </h3><ul class="links"><li class="taxonomy-term-reference-0"><a href="/article-categories/energy-policy-legislation">Energy Policy &amp; Legislation</a></li><li class="taxonomy-term-reference-1"><a href="/article-categories/commission-watch">Commission Watch</a></li></ul></div><div class="field field-name-field-members-only field-type-list-boolean field-label-above"><div class="field-label">Viewable to All?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-article-featured field-type-list-boolean field-label-above"><div class="field-label">Is Featured?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-department field-type-taxonomy-term-reference field-label-above clearfix"><h3 class="field-label">Department: </h3><ul class="links"><li class="taxonomy-term-reference-0"><a href="/department/commission-watch">Commission Watch</a></li></ul></div><div class="field field-name-field-image-picture field-type-image field-label-above"><div class="field-label">Image Picture:&nbsp;</div><div class="field-items"><div class="field-item even"><img src="http://www.fortnightly.com/sites/default/files/0412-cvr_2.jpg" width="654" height="875" alt="" /></div></div></div><div class="field field-name-field-fortnightly-40 field-type-list-boolean field-label-above"><div class="field-label">Is Fortnightly 40?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-law-lawyers field-type-list-boolean field-label-above"><div class="field-label">Is Law &amp; Lawyers:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-above clearfix">
<div class="field-label">Tags:&nbsp;</div>
<div class="field-items">
<a href="/tags/aep">AEP</a><span class="pur_comma">, </span><a href="/tags/alliant">Alliant</a><span class="pur_comma">, </span><a href="/tags/ameren">Ameren</a><span class="pur_comma">, </span><a href="/tags/american-electric-power">American Electric Power</a><span class="pur_comma">, </span><a href="/tags/aps">APS</a><span class="pur_comma">, </span><a href="/tags/atc">ATC</a><span class="pur_comma">, </span><a href="/tags/central-maine-power">Central Maine Power</a><span class="pur_comma">, </span><a href="/tags/charles-river-associates">Charles River Associates</a><span class="pur_comma">, </span><a href="/tags/cinergy">Cinergy</a><span class="pur_comma">, </span><a href="/tags/citi">Citi</a><span class="pur_comma">, </span><a href="/tags/comed">ComEd</a><span class="pur_comma">, </span><a href="/tags/commission">Commission</a><span class="pur_comma">, </span><a href="/tags/communication">Communication</a><span class="pur_comma">, </span><a href="/tags/consumers-power">Consumers Power</a><span class="pur_comma">, </span><a href="/tags/cost">Cost</a><span class="pur_comma">, </span><a href="/tags/dayton-power-light">Dayton Power &amp; Light</a><span class="pur_comma">, </span><a href="/tags/dominion">Dominion</a><span class="pur_comma">, </span><a href="/tags/duke-energy">Duke Energy</a><span class="pur_comma">, </span><a href="/tags/electric-transmission">Electric Transmission</a><span class="pur_comma">, </span><a href="/tags/exelon">Exelon</a><span class="pur_comma">, </span><a href="/tags/fcc">FCC</a><span class="pur_comma">, </span><a href="/tags/federal-communications-commission">Federal Communications Commission</a><span class="pur_comma">, </span><a href="/tags/federal-communications-commission-fcc">Federal Communications Commission (FCC)</a><span class="pur_comma">, </span><a href="/tags/federal-energy-regulatory-commission">Federal Energy Regulatory Commission</a><span class="pur_comma">, </span><a href="/tags/federal-energy-regulatory-commission-ferc">Federal Energy Regulatory Commission (FERC)</a><span class="pur_comma">, </span><a href="/tags/ferc">FERC</a><span class="pur_comma">, </span><a href="/tags/firstenergy">FirstEnergy</a><span class="pur_comma">, </span><a href="/tags/ge">GE</a><span class="pur_comma">, </span><a href="/tags/illinois-commerce-commission">Illinois Commerce Commission</a><span class="pur_comma">, </span><a href="/tags/iso">ISO</a><span class="pur_comma">, </span><a href="/tags/iso-new-england">ISO New England</a><span class="pur_comma">, </span><a href="/tags/iso-ne">ISO-NE</a><span class="pur_comma">, </span><a href="/tags/lge">LG&amp;E</a><span class="pur_comma">, </span><a href="/tags/lmp">LMP</a><span class="pur_comma">, </span><a href="/tags/locational-marginal-price">Locational marginal price</a><span class="pur_comma">, </span><a href="/tags/locational-marginal-prices">Locational marginal prices</a><span class="pur_comma">, </span><a href="/tags/maine-puc">Maine PUC</a><span class="pur_comma">, </span><a href="/tags/maps">MAPS</a><span class="pur_comma">, </span><a href="/tags/miso">MISO</a><span class="pur_comma">, </span><a href="/tags/new-jersey">New Jersey</a><span class="pur_comma">, </span><a href="/tags/ohio-edison">Ohio Edison</a><span class="pur_comma">, </span><a href="/tags/pge">PG&amp;E</a><span class="pur_comma">, </span><a href="/tags/pjm">PJM</a><span class="pur_comma">, </span><a href="/tags/questar">Questar</a><span class="pur_comma">, </span><a href="/tags/renewable">Renewable</a><span class="pur_comma">, </span><a href="/tags/renewable-energy">Renewable Energy</a><span class="pur_comma">, </span><a href="/tags/rto">RTO</a><span class="pur_comma">, </span><a href="/tags/transmission">Transmission</a><span class="pur_comma">, </span><a href="/tags/utah-public-service-commission">Utah Public Service Commission</a><span class="pur_comma">, </span><a href="/tags/wisconsin-public-service">Wisconsin Public Service</a> </div>
</div>
Wed, 31 Dec 2014 15:31:07 +0000meacott18781 at http://www.fortnightly.comPublic Power Road Showhttp://www.fortnightly.com/fortnightly/2015/01/public-power-road-show
<div class="field field-name-field-import-deck field-type-text-long field-label-inline clearfix"><div class="field-label">Deck:&nbsp;</div><div class="field-items"><div class="field-item even"><p>Sue Kelly’s ‘world tour’ brings APPA home.</p>
</div></div></div><div class="field field-name-field-import-byline field-type-text-long field-label-inline clearfix"><div class="field-label">Byline:&nbsp;</div><div class="field-items"><div class="field-item even"><p><span style="font-size: 13.3333339691162px; line-height: 20.0063056945801px;">Bruce W. Radford</span></p>
</div></div></div><div class="field field-name-field-import-bio field-type-text-long field-label-inline clearfix"><div class="field-label">Author Bio:&nbsp;</div><div class="field-items"><div class="field-item even"><p><strong>Bruce W. Radford</strong> is publisher and editor-in-chief of <em>Public Utilities Fortnightly</em>. Reach him at <a href="mailto:radford@fortnightly.com">radford@fortnightly.com</a>.</p>
</div></div></div><div class="field field-name-field-import-volume field-type-node-reference field-label-inline clearfix"><div class="field-label">Magazine Volume:&nbsp;</div><div class="field-items"><div class="field-item even">Fortnightly Magazine - January 2015</div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><p>There's no one in the energy industry - and I mean absolutely <i>no one</i> - who is more on-message than Sue Kelly, now winding up her first year as CEO of the American Public Power Association.</p>
<p>"Are you working for the good guys?" I asked her, when I interviewed her last month, at her invitation, at her new 11th Floor office digs in suburban Virginia, overlooking the main runway at Washington's Reagan National Airport.</p>
<p>"In a word, yes," she answered. "At least the <i>better</i> guys."</p>
<p>"Our incentives are aligned with those of our customers. That's what has kept me going all these years."</p>
<p>And even during her prior lives, when she worked for the co-op sector at NRECA, the National Rural Electric Co-operative Association, in the late 1990s, and before that, when she served stints as a regulatory lawyer with both Crowell &amp; Moring and Miller, Ballis &amp; O'Neil, Sue has viewed her energy industry work strictly as a call to public service.</p>
<p>"Our guys live in the same towns as their customers. They go to church with them. They go to Rotary with them. When we say it's community power, we mean it."</p>
<p>And during the past year, CEO Kelly has embarked on what she calls her "World Tour," going everywhere from Wisconsin, to South Carolina, to Georgia, Texas, Utah, and you-name-it. Even the briefest look at her "CEO Blog" on the APPA web site will give you a sense of her itinerary over the past 12 months. A charity chili cook-off at the firehouse in Westerville, Ohio. Lunch with 20 female TVA employees (including a boilermaker, an engineer, and a human resources vp) at the Watts Bar Unit 2 nuclear construction site in Tennessee. You get the picture.</p>
<p>"Since I became CEO, she explains, "I decided to accept basically every speaking obligation I was asked to do by a member, if I could physically do it."</p>
<p><b>YET SOME HAVE BRANDED APPA AS "WHINERS WITH NO SOLUTIONS."</b> These critics see Kelly's association as opposing virtually anything that hints at electric restructuring or deregulation - and in particular, the U.S. Federal Energy Regulatory Commission (FERC) and its vision of an industry dedicated more to competition than rate base, including competitive regional power markets for energy and capacity.</p>
<p>So I questioned Kelly about the recent decision by WAPA (the Western Area Power Administration), to join the Southwest Power Pool (SPP), a FERC-regulated regional transmission organization that now operates an eastern-style, "Day Two" competitive regional power market.</p>
<p>"Do you see them," I asked, "as a traitor to your cause?"</p>
<p>"No," she answered. "Our members support that decision. Actually, WAPA went through a very public process on this - both whether to join an RTO and, if so, which one?</p>
<p>And why didn't WAPA go with MISO, the Midcontinent Independent System Operator?</p>
<p>"I don't want to speak for WAPA," Kelly noted, "but I believe they chose to go with SPP in part because already there was another federal PMA as an SPP member (the Southwestern Area Power Administration, or SWAPA). I think they just felt the culture there was more closely aligned, that co-ops and public power seemed to have a larger voice in SPP's policies and governance.</p>
<p>"It's RTO dating," she added. "It was a better fit. Our customers support that. And if they're supporting it, we're supporting it.</p>
<p>"And I think we have been unfairly painted as RTO haters. We are not RTO haters. We recognize the benefits that come out of RTOs: Wide-area dispatch, situational awareness, a single transmission tariff."</p>
<p>"But I do think we are pretty much capacity market haters at this point, through harsh experience."</p>
<p>A half-dozen years ago, when Sue Kelly served as APPA's General Counsel and VP for Policy Analysis, she joined with Elise Caplan, the coordinator for APPA's Electric Market Reform Initiative, to publish an article in the Energy Bar Association's <i>Energy Law Journal</i> with the somewhat tongue-in-cheek title, "Time for a Day 1.5 Market: A Proposal to Reform RTO-Run Centralized Wholesale Electricity Markets." Among other ideas, that article called for the phasing out of centralized, bid-based locational capacity markets.</p>
<p>Kelly feels no different today. Her main gripe, as I see it, is that RTO capacity markets are one-sided. There's a sell side (the generators) but there's no true buy side - no true counterparties - because load-serving entities in the restructured states of the eastern RTO's can no longer bank on a firm service commitment from their customers, as public power utilities still can.</p>
<p>"When they did retail access," she explains, "they kind of broke the toys of the LSE's in PJM and New England. They can't make commitments anymore."</p>
<p>Kelly recalled a watershed moment from FERC's technical conference on capacity markets, held back in September 2013, when commissioner Cheryl LaFleur had asked Robert Ethier (from ISO New England) what he would do over again if given the chance, and he had answered that the problem stemmed from a load side that can't make commitments.</p>
<p>"And so I [Kelly] came up to him at the break and said: 'You realize we're the exception to the rule. We're the only counterparties left,' and he [Ethier] answered, 'Yes, I know.'"</p>
<p><b>BUT CAN KELLY STEER APPA INTO TOMORROW? </b>On that score I reminded Kelly that the American public doesn't much understand the difference between public power and the IOUs. Let Jay Leno stop a man or woman on the street, and he probably gets an earful something like this: "Utilities? They aren't corporations, right? They aren't businesses. They're <i>utilities</i>."</p>
<p>So I asked Kelly, "<span style="font-size: 13.3333339691162px; line-height: 1.538em;">How do you give</span><span style="font-size: 13.3333339691162px; line-height: 1.538em;"> your members a way to define their brand in the eyes of consumers - to differentiate themselves from the Exelon's and the Entergy's of the world?"</span></p>
<p>"That's important," she replied, "to re-introduce ourselves to the next generation. But it's all wrapped up in a big hairball - in all the technological change that is going on: rooftop PV, plug-in hybrid vehicles, etc. This gives us an opportunity, if we can seize it."</p>
<p>"And that's one of the reasons that Tobbie [Tobias Sellier, APPA's Director of Media Relations &amp; Communications, who helped set up the interview] has pushed me to get into social media. I blog. I have a Twitter account. And of course I don't have a boatload of followers - I'm not up to Taylor Swift country yet - but it's growing. Our members are reading it."</p>
<p>Yet those members already are singing in the choir. How do you bring the American consumer on board?</p>
<p>"First of all, we are actually in the community. You own us, through the medium of local government. Number two, we are not for profit. We don't take 20 percent off the top and deliver it to shareholders. Number 3, we do electricity. We've done it for 100 years.</p>
<p>"But all of this requires us to seize the moment. That is one of my big messages, when I am flying around thither and yon. This is our moment of opportunity. We need to work on it."</p>
</div></div></div><div class="field field-name-field-members-only field-type-list-boolean field-label-above"><div class="field-label">Viewable to All?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-article-featured field-type-list-boolean field-label-above"><div class="field-label">Is Featured?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-department field-type-taxonomy-term-reference field-label-above clearfix"><h3 class="field-label">Department: </h3><ul class="links"><li class="taxonomy-term-reference-0"><a href="/department/frontlines">Frontlines</a></li></ul></div><div class="field field-name-field-image-picture field-type-image field-label-above"><div class="field-label">Image Picture:&nbsp;</div><div class="field-items"><div class="field-item even"><img src="http://www.fortnightly.com/sites/default/files/1501-FR.jpg" width="875" height="578" alt="" /></div></div></div><div class="field field-name-field-fortnightly-40 field-type-list-boolean field-label-above"><div class="field-label">Is Fortnightly 40?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-law-lawyers field-type-list-boolean field-label-above"><div class="field-label">Is Law &amp; Lawyers:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-above clearfix">
<div class="field-label">Tags:&nbsp;</div>
<div class="field-items">
<a href="/tags/sue-kelly">Sue Kelly</a><span class="pur_comma">, </span><a href="/tags/appa">APPA</a><span class="pur_comma">, </span><a href="/tags/public-power-0">Public Power</a><span class="pur_comma">, </span><a href="/tags/nreca">NRECA</a><span class="pur_comma">, </span><a href="/tags/rural-electric-co-operative">Rural Electric Co-operative</a><span class="pur_comma">, </span><a href="/tags/crowell-moring">Crowell &amp; Moring</a><span class="pur_comma">, </span><a href="/tags/miller">Miller</a><span class="pur_comma">, </span><a href="/tags/ballis-o%E2%80%99neil">Ballis &amp; O’Neil</a><span class="pur_comma">, </span><a href="/tags/community">community</a><span class="pur_comma">, </span><a href="/tags/restructuring">Restructuring</a><span class="pur_comma">, </span><a href="/tags/deregulation">Deregulation</a><span class="pur_comma">, </span><a href="/tags/federal-energy-regulatory-commission">Federal Energy Regulatory Commission</a><span class="pur_comma">, </span><a href="/tags/ferc">FERC</a><span class="pur_comma">, </span><a href="/tags/competition">competition</a><span class="pur_comma">, </span><a href="/tags/wapa">WAPA</a><span class="pur_comma">, </span><a href="/tags/western-area-power-administration">Western Area Power Administration</a><span class="pur_comma">, </span><a href="/tags/southwest-power-pool">Southwest Power Pool</a><span class="pur_comma">, </span><a href="/tags/spp">SPP</a><span class="pur_comma">, </span><a href="/tags/rto">RTO</a><span class="pur_comma">, </span><a href="/tags/miso">MISO</a><span class="pur_comma">, </span><a href="/tags/southwestern">Southwestern</a><span class="pur_comma">, </span><a href="/tags/swapa">SWAPA</a><span class="pur_comma">, </span><a href="/tags/elise-caplan">Elise Caplan</a><span class="pur_comma">, </span><a href="/tags/energy-law-journal">Energy Law Journal</a><span class="pur_comma">, </span><a href="/tags/capacity">capacity</a><span class="pur_comma">, </span><a href="/tags/retail">Retail</a><span class="pur_comma">, </span><a href="/tags/pjm">PJM</a><span class="pur_comma">, </span><a href="/tags/new-england">New England</a><span class="pur_comma">, </span><a href="/tags/cheryl-lafleur-0">Cheryl LaFleur</a><span class="pur_comma">, </span><a href="/tags/robert-ethier">Robert Ethier</a><span class="pur_comma">, </span><a href="/tags/exelon">Exelon</a><span class="pur_comma">, </span><a href="/tags/entergy">Entergy</a><span class="pur_comma">, </span><a href="/tags/tobias-sellier">Tobias Sellier</a> </div>
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Sun, 28 Dec 2014 20:28:59 +0000meacott18741 at http://www.fortnightly.comDigest (December 2014)http://www.fortnightly.com/fortnightly/2014/12/digest-december-2014
<div class="field field-name-field-import-volume field-type-node-reference field-label-inline clearfix"><div class="field-label">Magazine Volume:&nbsp;</div><div class="field-items"><div class="field-item even">Fortnightly Magazine - December 2014</div></div></div><div class="field field-name-field-import-image field-type-image field-label-above"><div class="field-label">Image:&nbsp;</div><div class="field-items"><div class="field-item even"><img src="http://www.fortnightly.com/sites/default/files/1412-DIG-NationalAquarium.jpg" width="1000" height="643" alt="Baltimore’s National Aquarium would meet 40% of load via off-site solar." title="Baltimore’s National Aquarium would meet 40% of load via off-site solar." /></div><div class="field-item odd"><img src="http://www.fortnightly.com/sites/default/files/1412-DIG-MandalayBay-Solar.jpg" width="564" height="420" alt="The 6.4-MW solar PV arrant atop Mandalay Bay Resort and Casino." title="The 6.4-MW solar PV arrant atop Mandalay Bay Resort and Casino." /></div><div class="field-item even"><img src="http://www.fortnightly.com/sites/default/files/1412-DIG-SolarGen2.jpg" width="967" height="617" alt="Southern Power acquires Solar Gen 2 (150MW), to serve San Diego Gas &amp; Electric." title="Southern Power acquires Solar Gen 2 (150MW), to serve San Diego Gas &amp; Electric." /></div><div class="field-item odd"><img src="http://www.fortnightly.com/sites/default/files/1412-DIG-Sony_eVgo_chargers.jpg" width="1000" height="600" alt="NRG eVgo charging stations at the Sony Pictures lot in Culver City." title="NRG eVgo charging stations at the Sony Pictures lot in Culver City." /></div><div class="field-item even"><img src="http://www.fortnightly.com/sites/default/files/1412-DIG-EnphaseAC-Battery.jpg" width="707" height="444" alt="Enphase AC Battery provides 1.2 KWh storage and 275W/550W power output. " title="Enphase AC Battery provides 1.2 KWh storage and 275W/550W power output. " /></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><h4><b>Renewable Energy</b></h4>
<p><b>DTE Biomass Energy</b> completed its 9.6-MW landfill gas-to-energy project at the Uwharrie Environmental Landfill in Mt. Gilead. Landfill gas at the site is used to generate renewable energy which is subsequently sold to <b>Duke Energy Progress</b>. The Uwharrie facility will more than double DTE Biomass' generation capacity in North Carolina, where it already operates six renewable energy projects.</p>
<p><b>OwnEnergy</b> entered into a long-term PPA with Yahoo. Under the terms of the PPA, Yahoo will purchase wind power to offset much of the company's energy usage in the Great Plains region. While Yahoo is one of the first tech companies to embrace this model of community-centric partnership, the trend for corporate purchasers to buy wind directly from wind farms is gaining pace.</p>
<p><b>Sunshine Gas Producers</b>, a joint venture between <b>DTE Biomass Energy</b> and <b>EIF Renewable</b> <b>Energy Holdings</b> through its subsidiary <b>Landfill Energy Systems</b>, started generating electricity from landfill gas at its recently constructed renewable energy facility at the Sunshine Canyon Landfill. DTE Biomass Energy, the developer and operator of the project, declared commercial operation of the 20-MW facility at the landfill, owned and operated by Browning-Ferris Industries of California, a subsidiary of Republic Services. Landfill gas generated at the site will be used to produce renewable energy to be sold to <b>Pacific Gas &amp; Electric</b> under a long-term PPA.</p>
<p><b>Pattern Energy Group LP</b> announced a joint venture partnership with <b>Henvey Inlet First Nation</b> to jointly develop, own, and operate the 300-MW Henvey Inlet Wind project, to be built in Parry Sound District, Ontario, Canada. Pattern will own a 50% joint venture interest in the project, which has signed a 20-year power purchase agreement with Ontario Power Authority for 100% of its expected output. Nigig Power Corp., wholly owned by Henvey Inlet First Nation, will own the remaining 50%.</p>
<p><b>NRG Energy</b> and <b>MGM Resorts International</b> completed installation of the world's largest rooftop solar array on a convention center. Covering approximately 20 acres atop the Mandalay Bay Resort and Casino, the 6.4-MW photovoltaic array will produce enough electricity to power the equivalent of approximately 1,000 U.S. homes annually and is the first of its kind on the Las Vegas Strip. NRG financed, constructed, owns and operates the installation for MGM Resorts at Mandalay Bay Resort and Casino. Through a PPA, Mandalay Bay Resort will purchase all the electricity generated by both solar arrays.</p>
<p><b>OneEnergy Renewables</b> and <b>Constellation</b> developed a 4.3-MW solar electric project located on the Eastern Shore of Maryland. The off-site system, which is part of an electricity supply agreement between Constellation and the <b>National Aquarium</b>, will provide power for approximately 40 percent of the Aquarium's electricity requirements for the next 25 years. Constellation will finance, build, and own the system.</p>
<p><b>Swinerton Renewable Energy</b> will standardize its entire solar fleet on <b>Locus Energy's</b> SolarNOC monitoring platform and PVIQ analytics suite as part of its SOLV enterprise solution for optimizing and managing plant Swinerton Renewable Energys. By leveraging Locus Energy's web-based SolarNOC software, Swinerton's fleet operators will be able to more efficiently organize and assess performance data over a set of solar PV assets spread across a geographical area, as well as streamline O&amp;M workflows. In addition, Locus Energy has expanded its data acquisition and presentation capabilities, enabling Swinerton to integrate data from its SCADA system. Swinerton Renewable Energy will also integrate Locus Energy's PVIQ analytics suite, to allow PV system managers to analyze system and fleet level performance and quickly identify any causes of underperformance.</p>
<p><b>Healthy Planet Partners, LLC</b> (HPP) and <b>Kyocera Solar</b> completed a solar rooftop and carport system at the Seattle Mariners Spring Training facility in Peoria, AZ. HPP developed and financed the project with partner Kyocera Solar to provide engineering and project management support as well as acting as a finance partner. <b>Sky Engineering and Construction</b> built the system using Kyocera's high-efficiency solar modules. HPP financed, owns, and operates the 345-kW solar array and the Seattle Mariners will host the system under a long-term PPA.</p>
<h4><b>M&amp;A</b></h4>
<p><b>Cleco Corporation</b> entered into a definitive agreement to be acquired by a group of North American long-term infrastructure investors led by <b>Macquarie Infrastructure</b> <b>and Real Assets</b> (MIRA) and <b>British Columbia Investment Management Corporation</b> (bcIMC), together with John Hancock Financial and other infrastructure investors (collectively, "investor group"). The agreement values Cleco at approximately $4.7 billion, including approximately $1.3 billion of assumed debt.</p>
<p><b>NRG Energy</b> acquired <b>Pure Energies Group</b>, a residential solar industry provider in the area of web-based customer acquisition. Pure Energies completes the residential solar capabilities NRG has been working to assemble and complements NRG's acquisition earlier this year of Roof Diagnostics Solar. Pure Energies and its proprietary customer acquisition process will help NRG Home Solar reduce customer acquisition costs while providing a simplified solar adoption process. Pure Energies' online capabilities also are expected, ultimately, to provide a valuable sales channel for NRG's Goal Zero line of portable solar and energy storage products and NRG's retail businesses (NRG, Reliant and Green Mountain).</p>
<p><b>Duke Energy Progress</b> filed with the<b> Federal Energy Regulatory Commission</b> for approval to purchase the <b>North Carolina Eastern Municipal Power Agency's</b> (NCEMPA) generating assets for $1.2 billion. NCEMPA currently maintains partial ownership interest in several Duke Energy Progress plants, including Brunswick Nuclear Plant Units 1 and 2, Mayo Plant, Roxboro Plant Unit 4, and the Harris Nuclear Plant. The Power Agency's ownership interest in these plants represents approximately 700 MW of generating capacity. In addition to the FERC review, the deal must win OK from utility commissions in North and South Carolina, along with the U.S. Nuclear Regulatory Commission. Under the terms of the agreement, approvals must be received and the transaction completed by the end of 2016.</p>
<p><b>Trina Solar Limited</b> (Trina Solar) signed a share purchase agreement to sell its 10.6-MW PV power plant located in Trehawke, UK to funds managed by Foresight Group LLP (Foresight). The utility-scale Trehawke solar power plant utilizes 41,404 Trina Solar TSM-255-PC05A modules and generates 10,300 MWh of electricity every year.</p>
<p><b>Southern Power</b> acquired the 150-MW Solar Gen 2 solar facility in California from <b>First Solar</b>. The Solar Gen 2 facility is being built and will be operated and maintained by First Solar. Construction of the project began in 2013. Completion of the project is expected to occur later in the fourth quarter 2014. Southern Power will initially own 100 percent of the project, with First Solar agreeing to acquire a minority interest subject to certain terms and upon fulfillment of certain conditions. Electricity generated by the plant is contracted to serve a 25-year PPA with <b>San Diego Gas &amp;</b> <b>Electric Company</b> (SDG&amp;E).</p>
<p><b>Comverge </b>and <b>Constellation</b> signed an agreement to combine their demand response businesses serving commercial and industrial (C&amp;I) customers. The combined business will be operated as a new stand-alone company independent from Comverge and Constellation, and will focus on delivering a full spectrum of demand response offerings to C&amp;I customers across the United States. The merged enterprise will become one of the largest demand response companies in the industry. <b>H.I.G. Capital </b>will hold a majority ownership interest in the new company, and Constellation will retain a minority ownership interest.</p>
<p><b>The AES Corporation</b> entered into an agreement to sell its 49.62% equity interest in AES Entek Elektrik Üretimi A.Ş. (AES Entek), a joint venture with KOÇ HOLDING A.Ş. and AYGAZ A.Ş., in Turkey, to its partners. The sale represents 100% of AES' interest in assets in Turkey, consisting of 364 MW of operating natural gas and hydroelectric facilities and its interest in a coal-fired development project, for $125 million in equity proceeds to AES. Subject to customary regulatory approvals, this transaction is expected to close by the first quarter of 2015.</p>
<h4><b>Storage &amp; Distributed Resources</b></h4>
<p><b>NRG eVgo</b> completed installation of the largest corporate deployment of EV charging stations at <b>Sony Pictures Entertainment's</b> (SPE) lot and its offices in Culver City, California. SPE elected to participate in the eVgo Ready for Electric Vehicle (REV) program to provide turnkey EV charging solutions and charger maintenance and driver support 24 hours a day. The Level 2 chargers, dedicated for the use of individual employees, are compatible with all EVs and will integrate seamlessly with eVgo's comprehensive network.</p>
<p><b>Enphase Energy</b> introduced its Enphase AC Battery, an advanced energy storage solution with a modular, plug-and-play storage device fully integrated with the just-introduced Enphase Energy Management System. The Enphase AC battery, equipped with the S-series microinverter, will provide 1.2 KWh of energy storage and 275W/550W power-output. The Enphase Energy Management System, including the Enphase AC Battery, will be available through authorized distribution channels in the second half of 2015.</p>
<p><b>Southern California Edison </b>on November 5 announced the largest purchase of grid-connected energy storage in U.S. history. For SCE it marks the first time the utility has contracted with energy storage projects through a competitive resource solicitation. SCE will purchase 261 MW of energy storage resources - AES Energy Storage (100MW), Stem (85MW), Advanced Microgrid Solutions (50MW), Ice Energy Holdings, Inc. (25.6MW), NRG Energy (0.5MW) - an amount more than five times greater than the utility's minimum imposed energy storage procurement requirement of 50 MW, as prior order by the California Public Utilities Commission <i>(CPUC Decision 13-10-040, R. 10-12-007, Oct. 17, 2013).</i> At the same time, SCE announced separately it had signed contracts for power from more than 1800 final supply offers for a total of some 2,221MW in new energy resources (presumably including the 261MW of storage), representing roughly 10 percent of SCE's current total peak customer usage. The new contracts result from plans SCE had recommended in response to state forecasts of local reliability needs due to the closure of the San Onofre nuclear station and the anticipated retirement of older, gas-fired generating plants along the Southern California coastline that rely on ocean water for cooling.</p>
<h4><b>Nuclear</b></h4>
<p>The <b>U.S. Department of Energy</b> authorized <b>Bechtel </b>to resume engineering work at the Waste Treatment and Immobilization Plant - a facility that will treat some of the nation's liquid radioactive waste. The resumption comes after progress toward resolving technical matters for the High-Level Waste Vitrification Facility, where the most radioactive of the stored liquid will be processed. The government contracted Bechtel National to build the multi-facility complex at the Hanford Site in southeastern Washington. The plant will turn waste into a stable, solid glass form using a process called vitrification. Some 56 million gallons of radioactive waste await treatment there, stored in 177 underground tanks. The waste is a by-product of plutonium production from the 1940s Manhattan Project through the 1980s.</p>
<p>The <b>Electric Power Research Institute</b> (EPRI) will extend its collaborative research agreement with Japan's <b>Central Research Institute of Electric Power Industry</b> (CRIEPI) for an additional five years, through August 2019. The joint research effort will focus on materials science, including the performance of materials better-suited for nuclear plant components.</p>
<p><b>Natural Resources Canada</b> and the <b>China National Energy Administration</b> signed a memorandum of understanding on November 8 to advance collaboration between the two countries in the field of civilian nuclear energy, including development of advanced fuel reactors and exports to third-world markets. On the same day, <b>Candu Energy</b> signed a framework joint venture agreement with <b>China National Nuclear Corp.</b> to build its Advanced Fuel CANDU Reactor (AFCR) projects in China, and to develop additional opportunities around the world. The joint venture was signed in Beijing at the Great Hall of the People, before Canadian Prime Minister Stephen Harper and Chinese Premier Li Keqiang.</p>
<h4><b>Transmission</b></h4>
<p><b>ABB</b> won an order worth about $16 million from <b>Energinet.dk</b>, the transmission system operator in Denmark and <b>50 Hertz</b>, the transmission system operator responsible for the eastern part of Germany, to upgrade the 600-MW Kontek HVDC transmission link. The project scope includes installation of ABB's MACH control and protection system, remote operator work stations, training and spare parts. The link was originally delivered by ABB in 1995 and the modernization will help enhance the operational reliability of the link and reduce maintenance needs. The upgraded link is scheduled to go into full operation in 2016.</p>
<p><b>Burns &amp; McDonnell</b> plans to develop a grid stability awareness system (GSAS), a package of analytical software that will allow utilities to better utilize advanced synchrophasor technology. The joint project with <b>Southern Company</b> is part of a comprehensive program recently announced by the <b>U.S. Department of Energy</b> (DOE) to improve the resilience and reliability of the national power grid. The DOE will partially fund the project with a $1.4 million grant, which will be matched by $1.5 million in additional funding from the project participants. The project is part of an overall $10 million program announced recently by the DOE. The project is expected to be complete within two years.</p>
<p><b>ABB</b> won an order worth around $10 million from <b>Tamil Nadu Transmission Corporation Ltd</b> (TANTRANSCO), the state-owned utility, to build a new substation in downtown Chennai, India. As part of the turnkey contract, ABB will design, supply, install and commission the substation. Key product supplies include nine bays of 230 kV GIS, power transformers and 23 indoor switchgear units rated at 33 kV. The substations will also be equipped with IEC 61850 based open protection, automation and telecommunication systems as well as ancilliary systems. The project is scheduled to be completed in 2015.</p>
<h4><b>Fossil Generation</b></h4>
<p>The world's first commercial-scale carbon capture and storage (CCS) process on a coal-fired power plant officially opened at Boundary Dam Power Station in Estevan, Saskatchewan. When fully optimized, <b>SaskPower's</b> new process will capture up to a million tons of carbon dioxide annually. The captured carbon dioxide will be used for enhanced oil recovery, with the remainder stored safely and permanently deep underground and continuously monitored.</p>
<p><b>NET Power</b> secured funding and agreements for its $140 million, 50-MW demonstration power plant, that produces no greenhouse gas emissions and includes full carbon capture without requiring carbon capture equipment. The project is funded by a combination of cash and in-kind contributions from <b>Exelon</b> and <b>CB&amp;I</b>. <b>Toshiba</b> has begun manufacturing a CO<sub>2</sub> turbine for the project. Operations, maintenance and development arrangements have been completed with Exelon. EPC contracts are in place with CB&amp;I. The plant will be built at a site in Texas, with commissioning expected to begin in 2016 and be completed in 2017.</p>
<p><b>Xcel Energy</b> notified Minnesota regulators and <b>MISO</b> of its intent to stop generating electricity with coal at its Black Dog plant in Burnsville in April 2015, due to changing environmental regulations. The notification is the last step in a multi-year resource planning process. Black Dog's two coal units currently generate 232 MW of electricity. The company will continue to operate the 300-MW natural gas unit located at the Black Dog site. The coal units' retirement will trigger a multi-year decommissioning project. Starting in 2015, Xcel Energy will begin to remove coal handling equipment and close the coal yard and ash pond areas.</p>
<h4><b>Energy Efficiency</b></h4>
<p><b>The U.S. Department of Energy</b> (DOE) and the <b>DOE National Renewable Energy Laboratory</b> (NREL) published additional protocols for estimating energy savings for residential and commercial energy efficiency programs and measures. The new protocols address the following measures: chillers, commercial new construction and retro­commissioning. In addition to these protocols, the project has published a report that focuses on the methods used to estimate net energy savings in evaluation, measurement, and verification (EM&amp;V) studies for energy efficiency (EE) programs. Over time, DOE believes the effort will help reduce the cost of program evaluation, measurement, and verification and improve deemed savings estimates used in technical reference manuals across the country.</p>
<p><b>Governor Andrew M. Cuomo</b> announced the launch of NY Energy Manager (NYEM), New York's first energy management network operations center to provide public facilities across the state with real-time data on their energy use. The center is located at the Colleges of Nanoscale Science and Engineering at SUNY Polytechnic Institute in Albany. The NYEM was developed and is being deployed and managed by the <b>New York Power Authority</b> (NYPA) to provide up-to-the-moment energy use information and trending in state government facilities and other entities such as the City University of New York.</p>
<h4><b>Distribution</b></h4>
<p><b>Pepco Holdings Inc.</b> (PHI) entered into an enterprise-wide license agreement to deploy a comprehensive grid analytics solution from <b>Landis+Gyr </b>across its service territories. The analytics package includes a suite of applications aimed at enhancing asset life, reliability and distribution system optimization. PHI's operating companies, including Pepco, Delmarva Power and Atlantic City Electric, will deploy six different analytics applications for visualization, planning and real-time operational analytics support. PHI announced the deployment earlier this year of the GRIDplan Reliability module that is part of the analytics suite developed by <b>GRIDiant</b>, which was acquired in June by Landis+Gyr.</p>
</div></div></div><div class="field field-name-field-article-category field-type-taxonomy-term-reference field-label-above clearfix"><h3 class="field-label">Category (Actual): </h3><ul class="links"><li class="taxonomy-term-reference-0"><a href="/article-categories/generation-markets">Generation &amp; Markets</a></li><li class="taxonomy-term-reference-1"><a href="/article-categories/nuclear">Nuclear</a></li><li class="taxonomy-term-reference-2"><a href="/article-categories/renewables">Renewables</a></li><li class="taxonomy-term-reference-3"><a href="/article-categories/transmission">Transmission</a></li></ul></div><div class="field field-name-field-members-only field-type-list-boolean field-label-above"><div class="field-label">Viewable to All?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-article-featured field-type-list-boolean field-label-above"><div class="field-label">Is Featured?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-department field-type-taxonomy-term-reference field-label-above clearfix"><h3 class="field-label">Department: </h3><ul class="links"><li class="taxonomy-term-reference-0"><a href="/department/digest">Digest</a></li></ul></div><div class="field field-name-field-fortnightly-40 field-type-list-boolean field-label-above"><div class="field-label">Is Fortnightly 40?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-law-lawyers field-type-list-boolean field-label-above"><div class="field-label">Is Law &amp; Lawyers:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-above clearfix">
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<a href="/tags/dte-biomass">DTE Biomass</a><span class="pur_comma">, </span><a href="/tags/duke">Duke</a><span class="pur_comma">, </span><a href="/tags/ownenergy">OwnEnergy</a><span class="pur_comma">, </span><a href="/tags/yahoo">Yahoo</a><span class="pur_comma">, </span><a href="/tags/sunshine-gas">Sunshine Gas</a><span class="pur_comma">, </span><a href="/tags/eif-renewable">EIF Renewable</a><span class="pur_comma">, </span><a href="/tags/landfill-energy">Landfill Energy</a><span class="pur_comma">, </span><a href="/tags/pacific-gas-and-electric">Pacific Gas and Electric</a><span class="pur_comma">, </span><a href="/tags/pattern-energy">Pattern Energy</a><span class="pur_comma">, </span><a href="/tags/henvey-inlet">Henvey Inlet</a><span class="pur_comma">, </span><a href="/tags/first-nation">First Nation</a><span class="pur_comma">, </span><a href="/tags/nrg-energy">NRG Energy</a><span class="pur_comma">, </span><a href="/tags/mgm-resorts">MGM Resorts</a><span class="pur_comma">, </span><a href="/tags/oneenergy-renewables">OneEnergy Renewables</a><span class="pur_comma">, </span><a href="/tags/constellation">Constellation</a><span class="pur_comma">, </span><a href="/tags/national-aquarium">National Aquarium</a><span class="pur_comma">, </span><a href="/tags/swinerton-renewable">Swinerton Renewable</a><span class="pur_comma">, </span><a href="/tags/locus">Locus</a><span class="pur_comma">, </span><a href="/tags/healthy-planet-partners">Healthy Planet Partners</a><span class="pur_comma">, </span><a href="/tags/kyocera-solar">Kyocera Solar</a><span class="pur_comma">, </span><a href="/tags/sky-engineering">Sky Engineering</a><span class="pur_comma">, </span><a href="/tags/cleco">Cleco</a><span class="pur_comma">, </span><a href="/tags/macquarie-infrastructure">Macquarie Infrastructure</a><span class="pur_comma">, </span><a href="/tags/british-columbia-investment">British Columbia Investment</a><span class="pur_comma">, </span><a href="/tags/mira">MIRA</a><span class="pur_comma">, </span><a href="/tags/bcimc">bcIMC</a><span class="pur_comma">, </span><a href="/tags/pure-energies">Pure Energies</a><span class="pur_comma">, </span><a href="/tags/federal-energy-regulatory-commission">Federal Energy Regulatory Commission</a><span class="pur_comma">, </span><a href="/tags/north-carolina">North Carolina</a><span class="pur_comma">, </span><a href="/tags/ncempa">NCEMPA</a><span class="pur_comma">, </span><a href="/tags/trina-solar">Trina Solar</a><span class="pur_comma">, </span><a href="/tags/southern-power">Southern Power</a><span class="pur_comma">, </span><a href="/tags/first-solar">First Solar</a><span class="pur_comma">, </span><a href="/tags/san-diego">San Diego</a><span class="pur_comma">, </span><a href="/tags/comverge">Comverge</a><span class="pur_comma">, </span><a href="/tags/hig-capital-0">H.I.G. 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Thu, 11 Dec 2014 01:19:27 +0000meacott18656 at http://www.fortnightly.comXcel Energy to Close Coal-fired Generation at Black Dog Plant in 2015http://www.fortnightly.com/xcel-energy-close-coal-fired-generation-black-dog-plant-2015
<div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><p><strong>Xcel Energy</strong> notified Minnesota regulators and MISO of its intent to stop generating electricity with coal at its Black Dog plant in Burnsville in April 2015, due to changing environmental regulations. The notification is the last step in a multi-year resource planning process. Black Dog's two coal units currently generate 232 MW of electricity. The company will continue to operate the 300-MW natural gas unit located at the Black Dog site. The coal units' retirement will trigger a multi-year decommissioning project. Starting in 2015, Xcel Energy will begin to remove coal handling equipment and close the coal yard and ash pond areas. The company is working with local and state authorities to prepare for the closing of the coal and ash handling areas.</p>
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<div class="field-label">Tags:&nbsp;</div>
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<a href="/tags/xcel-energy">Xcel Energy</a><span class="pur_comma">, </span><a href="/tags/minnesota">Minnesota</a><span class="pur_comma">, </span><a href="/tags/miso">MISO</a><span class="pur_comma">, </span><a href="/tags/coal">coal</a><span class="pur_comma">, </span><a href="/tags/black-dog-plant">Black Dog plant</a><span class="pur_comma">, </span><a href="/tags/environmental-regulations">Environmental regulations</a><span class="pur_comma">, </span><a href="/tags/closing">closing</a> </div>
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<div class="field field-name-field-news-category field-type-taxonomy-term-reference field-label-above clearfix"><h3 class="field-label">Category: </h3><ul class="links"><li class="taxonomy-term-reference-0"><a href="/news-categories/generation-markets-news">Generation &amp; Markets News</a></li></ul></div>Thu, 23 Oct 2014 16:50:47 +0000aburr18306 at http://www.fortnightly.comWired Togetherhttp://www.fortnightly.com/fortnightly/2014/10/wired-together
<div class="field field-name-field-import-deck field-type-text-long field-label-inline clearfix"><div class="field-label">Deck:&nbsp;</div><div class="field-items"><div class="field-item even"><p>For DATC, grid expansion is a team effort.</p>
</div></div></div><div class="field field-name-field-import-byline field-type-text-long field-label-inline clearfix"><div class="field-label">Byline:&nbsp;</div><div class="field-items"><div class="field-item even"><p>Bruce W. Radford</p>
</div></div></div><div class="field field-name-field-import-bio field-type-text-long field-label-inline clearfix"><div class="field-label">Author Bio:&nbsp;</div><div class="field-items"><div class="field-item even"><p><b>Bruce Radford</b> is Editor-in-Chief of <i>Public Utilities Fortnightly</i>. Contact him at <a href="mailto:radford@pur.com">radford@pur.com</a></p>
</div></div></div><div class="field field-name-field-import-volume field-type-node-reference field-label-inline clearfix"><div class="field-label">Magazine Volume:&nbsp;</div><div class="field-items"><div class="field-item even">Fortnightly Magazine - October 2014</div></div></div><div class="field field-name-field-import-image field-type-image field-label-above"><div class="field-label">Image:&nbsp;</div><div class="field-items"><div class="field-item even"><img src="http://www.fortnightly.com/sites/default/files/1410-PIP-Photo-Grigsby.jpg" width="730" height="1000" alt="“If you would come to a DATC meeting, I would challenge you to tell me who was from Duke and who was from ATC.” – Phillip Grigsby, President, DATC" title="“If you would come to a DATC meeting, I would challenge you to tell me who was from Duke and who was from ATC.” – Phillip Grigsby, President, DATC" /></div><div class="field-item odd"><img src="http://www.fortnightly.com/sites/default/files/1410-PIP-Photo-Satterfield.jpg" width="768" height="1000" alt="“I know what some other partnerships look like, but I’ll say ours is unique – in how collaborative we are.” – Randy Satterfield, Exec. Vice President, DATC" title="“I know what some other partnerships look like, but I’ll say ours is unique – in how collaborative we are.” – Randy Satterfield, Exec. Vice President, DATC" /></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><p>As an industry, electric transmission today embodies both old and new. For every established, old-line utility building new lines to ensure reliability within its regulated service territory, there's a private developer, looking to unlock the potential of far-flung windpower resources.</p>
<p>Here, we interview the two top executives at Duke-American Transmission Co., LLC (DATC), a joint venture between Duke Energy, an historic utility now fully integrated across numerous energy-related products and services, and American Transmission Co. (ATC), a grid-only "Transco" formed initially by Wisconsin policymakers from divested portfolios of the state's electric utilities, in an effort to modernize the Wisconsin grid:</p>
<p>• <b>Phillip Grigsby,</b> coming on board from Duke Energy's commercial transmission group, is president of DATC and a member of the company's Board of Managers.</p>
<p>• <b>Randy Satterfield, </b>arriving from ATC, now serves as executive vice president of DATC and also sits on DATC's Board of Managers.</p>
<p>Bringing together expertise from those two leading electric industry companies - Duke Energy and ATC - Grigsby and Satterfield head up DATC, a new and unique industry player intent on building, owning and operating new electric transmission facilities across North America.</p>
<p> </p>
<p><b>FORTNIGHTLY:</b> Do you concentrate on reliability projects, or do you design what people would call "economic" projects?</p>
<p><b>GRIGSBY:</b> We've done both. But what we really try to do is look at a particular market and identify where we see problems and some creative solutions to those problems.</p>
<p><b>SATTERFIELD:</b> And we're finding more and more that even for projects that may traditionally be categorized as straight-line baseline reliability, there are economic benefits. The more we look at system planning, we're looking at projects that offer a cadre of benefits.</p>
<p><b>FORTNIGHTLY:</b> When I talk to RTOs, I always ask them to give me an example of economic projects they've approved, but they never can.</p>
<p><b>SATTERFIELD:</b> I'll give you an example. It's one that we built and placed in service earlier this year, I believe. It's called the "PP [Pleasant Prairie] Zion project. It was a MISO MVP ("Multi-Value Project") - a project deemed by MISO to be regionally beneficial, and therefore the costs of the project were shared across the MISO region. It's a five- or six-mile, 345-kV line from southeastern Wisconsin down into northeastern Illinois that was planned, designed and approved primarily for economic benefits to move power from North to South - from Wisconsin down into the Chicago market. There was some generation in the Milwaukee area that was getting stranded. That project has been paying off since the day it was placed in service.</p>
<p><b>FORTNIGHTLY:</b> And wasn't that an initial motivation for ATC - that Wisconsin suffered from "islanding" and wanted to form ATC to get the state's grid up to speed?</p>
<p><b>SATTERFIELD:</b> That's right. Back in the mid- to late 1990s Wisconsin experienced some reliability challenges. So policymakers, elected officials, stakeholders, and utilities all got together and said, "We need to do something about the grid." They passed legislation to encourage investor-owned utilities to divest their transmission assets for the formation of a transmission-only company - hence ATC. We've been in operation since 1-1-2001, and we've invested somewhere around three and one-half billion dollars into the grid in Wisconsin and the Upper Peninsula of Michigan.</p>
<p>Back in 2001, 2002, 2003, locational marginal prices in the ATC pricing zone were upwards of 25-30 percent higher than the neighboring pricing zones. Whereas today, they are within a percentage point or so of the neighboring pricing zones.</p>
<p><b>FORTNIGHTLY:</b> What about Federal Energy Regulatory Commission Order 1000? Your company profile says DATC is well-positioned, whether the region in question is using a "Sponsorship" model, where developers come forward with projects, or a "Planning/Solicitation" model, where regional planners identify needs and issue an RFP, looking for bids. What's your experience with Order 1000 - do you think it's working?</p>
<p><b>SATTERFIELD:</b> The RTO's MISO and SPP <i>[the two regional transmission organizations: Midcontinent Independent System Operator, and Southwest Power Pool]</i> are still kind of getting their compliance plans together. So it's probably still a bit early to tell from those RTO's how it's going to work out. What we know is that within SPP and MISO, they've taken kind of a competitive bid approach, meaning that they will identify problems, identify solutions, and then put those solutions out to bid. And all qualified developers can bid on those solutions. When that time comes, we'll be fully prepared to bid on appropriate projects.</p>
<p>PJM offers a sponsorship model, whereby the RTO will identify a need, and then solicit solutions for that need. And we can participate under that scheme as well. We have a very good bench of transmission planners. That's actually been one of ATC's strengths, and one of DATC's strengths as well - our ability to plan the system. So in PJM you get to plan the solution, submit it, and then if your solution is selected you get to go ahead and build it. We are looking at what some of those opportunities in PJM might be.</p>
<p>California has kind of been ahead of the game. They've had some competitively bid projects - they've got a live one on the table right now, a project called Delaney Colorado River [500 kV], that the CAISO board approved a month or so ago, and bids on that project are due mid-November. It's DATC's intention to bid. We suspect that some incumbents may bid as well, so it will be interesting to see how the bid selection process plays out, in the context of incumbent versus non-incumbent.</p>
<p><b>FORTNIGHTLY: </b>Is<b> </b>DATC an incumbent or a non-incumbent?</p>
<p><b>SATTERFIELD:</b> Well, it depends on where we are, right? In much of MISO we very well may be deemed to have some incumbency advantage. In some other areas clearly we are not incumbents. And let me get to the part that I didn't answer - Is Order 1000 working or not?</p>
<p>The answer is, it remains to be seen. There are a lot of advantages to what FERC was trying to do in Order 1000. We support that, but in many of the markets in which we intend to operate, the RTO's just aren't far enough down the path yet to make a judgment about whether it's working or not.</p>
<p>We expect it to work and certainly hope it will work, and will do everything we can do to facilitate successful implementation of Order 1000. That's just going to take a little more time.</p>
<p><b>FORTNIGHTLY:</b> What's your take on that crazy dispute between MISO and Southwest Power Pool, regarding the limited transfer capability from MISO North to MISO South, which is of course Entergy. Do we just have to wait until the two parties sign a settlement agreement, or is there some magic bullet to solve that?</p>
<p><b>SATTERFIELD:</b> I think it's the former. We don't really have a take on it. I think the parties ultimately will get together and figure out how to negotiate a settlement. When they do we'll see what it is.</p>
<p><b>FORTNIGHTLY:</b> In the meantime, is there any kind of market opportunity there? Why haven't we read a headline about some developer announcing a grid project to increase the transfer capability?</p>
<p><b>GRIGSBY:</b> I can't speak about other developers, but from my perspective, you're talking about large capital investments that have to be recovered over many years. It's not the easiest thing in the world to do one of those merchant projects. It carries a fair amount of risk. You're establishing a price point in time but whether or not that's going to hold up for 20 years is debatable.</p>
<p><b>SATTERFIELD:</b> And if you want to propose a project on the regulated side - one that fits within Order 1000 and within MISO's competitive bid process - then you probably won't see a solution come from a transmission developer. Rather, you'll probably see those developers wait until they can see a solution that MISO proposes, that they'll have the opportunity to bid on.</p>
<p>Just from a DATC perspective, if we saw a need there I'm not sure that we would spend a lot of resources identifying a solution when we would just turn that solution over to the RTO, and they'd turn around and open it up to competitive bid by all qualified developers.</p>
<p><b>GRIGSBY:</b> It's difficult for any participant to do all the engineering and planning work and then hand that over to somebody and say: "yeah, sure, share that with the industry and figure out who you might want to build it."</p>
<p><b>FORTNIGHTLY:</b> What about financing? Are you satisfied in the way that FERC handled the so-called "Martha Coakley case," which set policy on how FERC will set rates of return on common equity for wholesale transmission providers?</p>
<p><b>GRIGSBY: </b>From my perspective, what investors are really looking for is some sort of certainty. And so I think that to the extent that FERC took a position and explained how they are going to calculate rates of return going forward, that was a good thing for the market. The market seems to have responded generally positively to that.</p>
<p>Of course I think there's devils in the details. Once we see how FERC utilizes that policy going forward in some of the other cases, then we'll have a better feel. As I interpret it, I think that the FERC left themselves some discretion to recognize different financial and risk situations - particularly for some different development projects, to make sure that there's not a dis-incentive for people to be creative and take some longer-term risks, but we'll see if that interpretation holds true in some of these subsequent cases.</p>
<p><b>FORTNIGHTLY:</b> Who do you see as your competitor, when you try to put a project plan together?</p>
<p><b>GRIGSBY:</b> [Laughing] Who isn't?</p>
<p><b>FORTNIGHTLY:</b> Do you have an enemy number one? Or is there a transmission developer that you emulate - such that, when you were forming DATC, you were thinking, "Let's be more like those guys."</p>
<p><b>GRIGSBY:</b> I will argue that DATC - ATC and Duke Energy - were first movers in the way we approached transmission planning and project development. We came together, two large utilities with a long history. From the outside, we look a lot like an incumbent, because we have that sort of history. But we decided to work together on projects that weren't just about reliability, and weren't just about renewables going to market, or congestion. And we decided to do that coast-to-coast, in markets that we thought we could be competitive in.</p>
<p><b>FORTNIGHTLY: </b>Is DATC still a joint venture, or has it become something different?</p>
<p><b>GRIGSBY: </b>I don't think it's really changed since we created DATC back in 2011. It's a "50-50" enterprise between Duke and ATC. Our mission hasn't changed.</p>
<p><b>FORTNIGHTLY:</b> If it's 50-50, how do you work on a project? Does ATC do the engineering and Duke the financing?</p>
<p><b>GRIGSBY:</b> I always say that if you came to a DATC meeting of twenty people, I would challenge you to tell me who was from Duke and who was from ATC. It's a very collaborative effort. On any given project, more often than not, there's a combination of employees from both companies, working together. We think that allows us to leverage the best of combining the two companies, without creating a lot of bureaucracy.</p>
<p><b>FORTNIGHTLY:</b> And both ATC and Duke would issue bonds?</p>
<p><b>GRIGSBY: </b>The joint venture would secure its own financing, as DATC. I really see it as a partnership of equals. I hope Randy sees it the same way.</p>
<p><b>SATTERFIELD: </b>I absolutely do. I know what some other partnerships look like, but I'll say that our partnership is unique - in how similarly Duke and ATC see the transmission world. Phil is correct. You sit in a room with a DATC team and you can't tell who's from which company.</p>
<p><b>FORTNIGHTLY:</b> What about your accents, Tar Heel versus Midwesterner?</p>
<p><b>GRIGSBY:</b> You betcha. It gives us away sometimes.</p>
</div></div></div><div class="field field-name-field-article-category field-type-taxonomy-term-reference field-label-above clearfix"><h3 class="field-label">Category (Actual): </h3><ul class="links"><li class="taxonomy-term-reference-0"><a href="/article-categories/management-leadership">Management &amp; Leadership</a></li><li class="taxonomy-term-reference-1"><a href="/article-categories/strategy-planning">Strategy &amp; Planning</a></li></ul></div><div class="field field-name-field-members-only field-type-list-boolean field-label-above"><div class="field-label">Viewable to All?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-article-featured field-type-list-boolean field-label-above"><div class="field-label">Is Featured?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-department field-type-taxonomy-term-reference field-label-above clearfix"><h3 class="field-label">Department: </h3><ul class="links"><li class="taxonomy-term-reference-0"><a href="/department/people-power">People In Power</a></li></ul></div><div class="field field-name-field-image-picture field-type-image field-label-above"><div class="field-label">Image Picture:&nbsp;</div><div class="field-items"><div class="field-item even"><img src="http://www.fortnightly.com/sites/default/files/1410-PIP.jpg" width="1000" height="671" alt="" /></div></div></div><div class="field field-name-field-fortnightly-40 field-type-list-boolean field-label-above"><div class="field-label">Is Fortnightly 40?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-law-lawyers field-type-list-boolean field-label-above"><div class="field-label">Is Law &amp; Lawyers:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-above clearfix">
<div class="field-label">Tags:&nbsp;</div>
<div class="field-items">
<a href="/tags/datc">DATC</a><span class="pur_comma">, </span><a href="/tags/duke-american">Duke-American</a><span class="pur_comma">, </span><a href="/tags/american-transmission">American Transmission</a><span class="pur_comma">, </span><a href="/tags/atc">ATC</a><span class="pur_comma">, </span><a href="/tags/transco-wisconsin">Transco Wisconsin</a><span class="pur_comma">, </span><a href="/tags/phillip-grigsby">Phillip Grigsby</a><span class="pur_comma">, </span><a href="/tags/duke">Duke</a><span class="pur_comma">, </span><a href="/tags/randy-satterfield">Randy Satterfield</a><span class="pur_comma">, </span><a href="/tags/reliability">Reliability</a><span class="pur_comma">, </span><a href="/tags/islanding">islanding</a><span class="pur_comma">, </span><a href="/tags/economic">economic</a><span class="pur_comma">, </span><a href="/tags/pp-zion">PP Zion</a><span class="pur_comma">, </span><a href="/tags/miso">MISO</a><span class="pur_comma">, </span><a href="/tags/spp">SPP</a><span class="pur_comma">, </span><a href="/tags/rto">RTO</a><span class="pur_comma">, </span><a href="/tags/pjm">PJM</a><span class="pur_comma">, </span><a href="/tags/california-caiso">California CAISO</a><span class="pur_comma">, </span><a href="/tags/incumbent-order-1000">incumbent Order 1000</a><span class="pur_comma">, </span><a href="/tags/entergy">Entergy</a><span class="pur_comma">, </span><a href="/tags/martha-coakley">Martha Coakley</a> </div>
</div>
Tue, 07 Oct 2014 19:11:14 +0000meacott18151 at http://www.fortnightly.comHer Next Hurdlehttp://www.fortnightly.com/fortnightly/2014/09/her-next-hurdle
<div class="field field-name-field-import-deck field-type-text-long field-label-inline clearfix"><div class="field-label">Deck:&nbsp;</div><div class="field-items"><div class="field-item even"><p><span style="font-size: 13.3333339691162px; line-height: 20.5066661834717px;">ITC’s Linda Blair on where to build tomorrow’s grid.</span></p>
</div></div></div><div class="field field-name-field-import-byline field-type-text-long field-label-inline clearfix"><div class="field-label">Byline:&nbsp;</div><div class="field-items"><div class="field-item even"><p><span style="font-size: 13.3333339691162px; line-height: 20.0063056945801px;">Bruce W. Radford</span></p>
</div></div></div><div class="field field-name-field-import-bio field-type-text-long field-label-inline clearfix"><div class="field-label">Author Bio:&nbsp;</div><div class="field-items"><div class="field-item even"><p class="p1" style="font-size: 13.3333339691162px; line-height: 20.0063056945801px;"><strong>Bruce Radford</strong> is publisher and editor of <em>Public Utilities Fortnightly</em>. Reach him at <a href="mailto:radford@pur.com">radford@pur.com</a>.</p>
</div></div></div><div class="field field-name-field-import-volume field-type-node-reference field-label-inline clearfix"><div class="field-label">Magazine Volume:&nbsp;</div><div class="field-items"><div class="field-item even">Fortnightly Magazine - September 2014</div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><p>When we last spoke with Linda Blair, executive v.p. and chief business officer for grid giant ITC, a major player in the electric transmission sector, it was late last year, in Mid-December, and she was putting up a brave front following a major setback. <i>(See, <a href="http://www.fortnightly.com/fortnightly/2014/01/bundled-against-change">Bundled Against Change</a>, Commission Watch, January 2014, p. 26.)</i></p>
<p>Just three days earlier, Mississippi state regulators had effectively blocked her company's bid to acquire Entergy's multi-state transmission grid. The reason? As the regulators explained, Mississippi law could not abide the notion of the state's biggest electric utility selling off a major chunk of its business to an out-of-state absentee landlord.</p>
<p>But the utility landscape never stands still. Since then, the U.S. Federal Energy Regulatory Commission (FERC) - ITC's chief regulator - has seen the confirmation of both a new chairman (Cheryl LaFleur) and a new member (Norman Bay), the resignation of another (John Norris, effective August 20), and the nomination of yet another candidate (Colette Honorable, from the Arkansas PSC) who, if confirmed, would round out FERC's authorized five-person panel.</p>
<p>At the same time, FERC recently has opened new ground on three key fronts affecting ITC's business. First, on grid expansion: on the preemptive rights of incumbent utilities under Order 1000 to take the lead on new projects. Second, on raising capital: are rates of return too high, or are market interest rates too low? And third, on the unprecedented dispute between the Midcontinent ISO and the Southwest Power Pool, regarding unscheduled flows resulting from Entergy's absorption into MISO.</p>
<p>In the MISO-versus-SPP dispute, the latest wrinkle is MISO's recently introduced "Hurdle Rate" - a price signal of sorts that shows what new grid capacity might be worth, to link MISO-North with MISO-South.</p>
<p>On July 16, MISO proposed that if power exports from its older footprint to the newly acquired Entergy territory in its new South Region can show a net benefit in production cost savings of at least $9.57 per megawatt-hour (the hurdle rate), it will conduct a re-dispatch and allow North-to-South power flows (or S-N flows) to exceed 1000 megawatts (the total contract path capacity linking MISO and SPP) even though that would impose unscheduled flows across the SPP footprint and cause SPP to bill MISO as a transmission customer, as FERC had authorized temporarily this past spring. <i>(See, FERC Dkt. ER14-2445, filed July 16, 2014, and comments filed through Aug. 29, 2014.)</i></p>
<p>MISO proposes to update and re-calculate the hurdle rate monthly. In essence, MISO has designed the rate to make sure that congestion revenues from the higher flows will cover the cost of SPP's invoice for what it describes as an unauthorized overloading of its lines. <i>(For more, see <a href="http://www.fortnightly.com/fortnightly/2014/03/invoice-enclosed">Invoice Enclosed</a>, Commission Watch, March 2014, p. 16.)</i></p>
<p> </p>
<p><b>WITH THESE NEW DEVELOPMENTS IN MIND, WE TRACKED DOWN MS. BLAIR AGAIN,</b> earlier this summer, to ask her how ITC planned to navigate this new landscape. More specifically, where might ITC turn for its next major transmission project?</p>
<p><b>Fortnightly</b><b>:</b> What did you think about FERC Opinion 531 - what some folks call the Martha Coakley complaint - on how to figure rate of return for transmission? FERC announced some changes to its formula for calculating rate of return, but also said some controversial things. For example, FERC found some merit in arguments that capital markets are anomalous - that we're in a strange period, with bond prices too high and interest rates too low. And many say FERC knew Wall Street was watching, and so took pains not to rock the boat. Any thoughts?</p>
<p><b>Linda Blair</b><b>:</b> FERC's decision in the New England case provides policy direction for our company, especially regarding the still-pending complaint in the MISO region on the ROE issue<i>. (See FERC Dkt. EL14-12, filed Nov. 12, 2013.)</i> Transmission is a very aging infrastructure in this country. There is significant congestion as a result of that under-investment. So we were very encouraged. But they have not yet ruled on the MISO case, and that's the case that does directly affect us.</p>
<p><b>Fortnightly</b><b>:</b> In mid-May the FERC made headlines by retreating a bit on its opposition to state-sponsored rights of first refusal under Order 1000. Was that why you sought to be certified as a utility in Wisconsin, to give ITC the status of an incumbent, to sidestep the ROFR problem?</p>
<p><b>Blair</b><b>:</b> We did not take the steps we took in Wisconsin to get around future unknown state ROFR requirements. Rather, given the location [of the project] that's what the law required us to do.</p>
<p>But obviously, we don't believe that state ROFRs are needed or necessary. Certainly the RTOs and FERC are putting in place measures to ensure that people who develop transmission are qualified, that they have the necessary experience and expertise and financial wherewithal and credibility to own and operate utility assets. From our perspective we think that having state ROFRs would further impede needed investment in transmission infrastructure.</p>
<p><b>Fortnightly</b><b>:</b> What else do you see from Order 1000?</p>
<p><b>Blair</b><b>:</b> Maybe this gets into the weeds ... but people really need to understand. When we talk about competing for transmission projects, we're talking about a competitive solicitation process where the rates that people are charged are going to be set by what bid is accepted, and not based on actual costs. We have a cost-of-service model in this country ... but when you think about competitive bidding, we're taking a step away from that. We're recovering costs based on what's bid. So I would just throw that out there as a concept - a mind shift as we go forward.</p>
<p><b>Fortnightly</b><b>:</b> Which regions do you feel have most embraced Order 1000, to open the doors to companies like ITC?</p>
<p><b>Blair</b><b>:</b> Each of the regions are pursuing Order 1000 in different and various ways. ... And obviously, you can have the best rules in the world, but if there's no opportunity it won't matter.</p>
<p>So from our perspective, as we think about the opportunity landscape coupled with the implementation of Order 1000, we have targeted our focus in a couple of primary areas. For us, our initial focus is around SPP and MISO. They are RTOs. They have made significant progress on Order 1000. We have a presence in both. So clearly, SPP and MISO would represent our number one target area.</p>
<p><b>Fortnightly</b><b>:</b> Speaking of MISO and SPP, how do you see that fight turning out? Do you have a crystal ball?</p>
<p><b>Blair</b>: If I did I'd be in a different profession. Obviously, I believe the parties ultimately will pursue a settlement - that's essentially what FERC essentially told them, to go off and see if the parties can work it out amongst themselves.</p>
<p>I mean look. There's a lack of transmission across the MISO-SPP seam. But customers benefit when congestion is eliminated. And so ultimately, what this argument comes down to is, who's going to pay? And that's where the focus needs to be amongst the parties.</p>
<p><b>Fortnightly</b><b>:</b> If a developer wanted to hedge their risk on how that case comes out, they'd go down into the Missouri Boot Heel and build transmission to connect MISO North with MISO South. Any chance that might be ITC?</p>
<p><b>Blair</b><b>: </b><i>[Laughing]</i> I wouldn't want to speculate or comment. Obviously we are in the transmission business.</p>
</div></div></div><div class="field field-name-field-article-category field-type-taxonomy-term-reference field-label-above clearfix"><h3 class="field-label">Category (Actual): </h3><ul class="links"><li class="taxonomy-term-reference-0"><a href="/article-categories/transmission">Transmission</a></li></ul></div><div class="field field-name-field-members-only field-type-list-boolean field-label-above"><div class="field-label">Viewable to All?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-article-featured field-type-list-boolean field-label-above"><div class="field-label">Is Featured?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-department field-type-taxonomy-term-reference field-label-above clearfix"><h3 class="field-label">Department: </h3><ul class="links"><li class="taxonomy-term-reference-0"><a href="/department/frontlines">Frontlines</a></li></ul></div><div class="field field-name-field-image-picture field-type-image field-label-above"><div class="field-label">Image Picture:&nbsp;</div><div class="field-items"><div class="field-item even"><img src="http://www.fortnightly.com/sites/default/files/1409-FR.jpg" width="1000" height="578" alt="" /></div></div></div><div class="field field-name-field-fortnightly-40 field-type-list-boolean field-label-above"><div class="field-label">Is Fortnightly 40?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-law-lawyers field-type-list-boolean field-label-above"><div class="field-label">Is Law &amp; Lawyers:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-above clearfix">
<div class="field-label">Tags:&nbsp;</div>
<div class="field-items">
<a href="/tags/itc">ITC</a><span class="pur_comma">, </span><a href="/tags/linda-blair">Linda Blair</a><span class="pur_comma">, </span><a href="/tags/mississippi">Mississippi</a><span class="pur_comma">, </span><a href="/tags/entergy">Entergy</a><span class="pur_comma">, </span><a href="/tags/transmission">Transmission</a><span class="pur_comma">, </span><a href="/tags/federal-energy-regulatory-commission">Federal Energy Regulatory Commission</a><span class="pur_comma">, </span><a href="/tags/fer">FER</a><span class="pur_comma">, </span><a href="/tags/cheryl-lafleur-0">Cheryl LaFleur</a><span class="pur_comma">, </span><a href="/tags/norman-bay">Norman Bay</a><span class="pur_comma">, </span><a href="/tags/john-norris">John Norris</a><span class="pur_comma">, </span><a href="/tags/colette-honorable">Colette Honorable</a><span class="pur_comma">, </span><a href="/tags/arkansas">Arkansas</a><span class="pur_comma">, </span><a href="/tags/grid-0">grid</a><span class="pur_comma">, </span><a href="/tags/expansion">expansion</a><span class="pur_comma">, </span><a href="/tags/order-1000">Order 1000</a><span class="pur_comma">, </span><a href="/tags/midcontinent-iso">MidContinent ISO</a><span class="pur_comma">, </span><a href="/tags/southwest-power-pool">Southwest Power Pool</a><span class="pur_comma">, </span><a href="/tags/miso">MISO</a><span class="pur_comma">, </span><a href="/tags/spp">SPP</a><span class="pur_comma">, </span><a href="/tags/hurdle-rate">Hurdle Rate</a><span class="pur_comma">, </span><a href="/tags/martha-coakley">Martha Coakley</a><span class="pur_comma">, </span><a href="/tags/wall-street">Wall Street</a><span class="pur_comma">, </span><a href="/tags/new-england">New England</a><span class="pur_comma">, </span><a href="/tags/rofo">ROFO</a><span class="pur_comma">, </span><a href="/tags/wisconsin">Wisconsin</a><span class="pur_comma">, </span><a href="/tags/missouri">Missouri</a> </div>
</div>
Wed, 03 Sep 2014 21:41:10 +0000meacott17846 at http://www.fortnightly.comDigest (May 2014)http://www.fortnightly.com/fortnightly/2014/05/digest-may-2014
<div class="field field-name-field-import-volume field-type-node-reference field-label-inline clearfix"><div class="field-label">Magazine Volume:&nbsp;</div><div class="field-items"><div class="field-item even">Fortnightly Magazine - May 2014</div></div></div><div class="field field-name-field-import-image field-type-image field-label-above"><div class="field-label">Image:&nbsp;</div><div class="field-items"><div class="field-item even"><img src="http://www.fortnightly.com/sites/default/files/1405-DIG-GeronimoEnergyAurora.jpg" width="1500" height="929" alt="Geronimo Energy’s Aurora Solar Project won an RFP to supply Excel with energy and capacity." title="Geronimo Energy’s Aurora Solar Project won an RFP to supply Excel with energy and capacity." /></div><div class="field-item odd"><img src="http://www.fortnightly.com/sites/default/files/1405-DIG-DC-Cook-Plant.jpg" width="1125" height="847" alt="Babcock &amp; Wilcox will refit AEP’s Cook nuclear plant." title="Babcock &amp; Wilcox will refit AEP’s Cook nuclear plant." /></div><div class="field-item even"><img src="http://www.fortnightly.com/sites/default/files/1405-DIG-MISO.jpg" width="595" height="335" alt="MISO breaks ground in Little Rock for its new Southern operations center. " title="MISO breaks ground in Little Rock for its new Southern operations center. " /></div><div class="field-item odd"><img src="http://www.fortnightly.com/sites/default/files/1405-DIG-ToshibaSCiBBattery.jpg" width="1125" height="768" alt="" /></div><div class="field-item even"><img src="http://www.fortnightly.com/sites/default/files/1405-DIG-CrystalRiverNuclearPlant.jpg" width="450" height="326" alt="" /></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><h4>Renewable Energy</h4>
<p><b>SunEdison</b>, along with Nationwide Mutual Insurance Company, National Bank of Arizona (NBAZ), and Sol Systems announced a $50 million fund, to build a 13.4-MW solar portfolio for the State of California prison and hospital systems. Sol Systems advised Nationwide Mutual Insurance on the acquisition of the equity in the transaction. SunEdison secured long-term debt for the projects from the National Bank of Arizona (NBAZ).</p>
<p><b>Minnesota Public Utilities Commission</b> (PUC) ruled in favor of solar as a cost-competitive energy source for <b>Xcel Energy</b>. Geronimo Energy's Aurora Solar Project was selected by the PUC to fill a portion of Xcel's future generation needs. Aurora Solar is a 100-MW distributed solar generation project that will utilize solar arrays ranging in size from 2 MW to 10 MW across Xcel's service territory. The project will interconnect to multiple Xcel Energy substations across Minnesota and will provide energy and capacity for the local distribution network.</p>
<p>The <b>Federal Energy Regulatory Commission</b> (FERC) issued a 10-year pilot license to Public Utility District No. 1 Snohomish County for the proposed Admiralty Inlet Pilot Tidal Project,to be located in the Puget Sound. The 600-kW Admiralty Inlet Project is experimental - designed to determine whether commercial development of the tidal energy resources of Puget Sound is commercially viable. The pilot license authorizes Public Utility District No. 1 to study, monitor, and evaluate the environmental, economic, and cultural effects of hydrokinetic energy. The license also contains several monitoring and adaptive management requirements to protect against adverse impacts.</p>
<p><b>SunEdison</b> completed construction of a 24-MW solar power plant located in the California Desert. The Cascade solar power plant will supply renewable electricity to <b>San Diego Gas &amp; Electric </b>(SDG&amp;E) through a 20-year PPA that was awarded under the California Renewable Auction Mechanism (RAM). The 150-acre solar power plant is comprised of more than 75,000 SunEdison Silvantis Monocrystalline Solar PV Modules mounted to SunEdison AP90 Single Axis Trackers. The plant will be managed by the SunEdison Renewable Operation Center (ROC), which provides asset management, monitoring, field dispatch and reporting services.</p>
<p><b>Sempra U.S. Gas &amp; Power</b> and <b>Consolidated Edison Development </b>(ConEdison Development) have partnered on five solar projects in Nevada and California. The projects include Sempra U.S. Gas &amp; Power's 250-MW Copper Mountain Solar 3 project near Las Vegas, and ConEdison Development's CED California Holdings portfolio: the 50-MW Alpaugh 50, 20-MW Alpaugh North and 20-MW White River 1 facilities in Tulare County, and the 20-MW Corcoran 1 facility in Kings County. The renewable power output from all of the projects has been sold under long-term contracts. Upon finalization of the agreements, Sempra U.S. Gas &amp; Power and ConEdison Development holding companies each will own a 50-percent interest in the five solar facilities. The agreement relative to the CED California Holdings projects is subject to regulatory approvals, which are expected during the second quarter of 2014.</p>
<p><b>First Solar</b> completed the 1.3MW solar PV power plant at Kitakyushu-shi, Japan. Powered by First Solar FS Series 3 Black PV modules, the plant will generate approximately 1,400 MWh of solar electricity per year. Power from the project will be purchased by Kyushu Electric Power Company. First Solar holds 100 percent equity in the project. Obayashi Corporation and Yaskawa Electric Corporation constructed the project.</p>
<p><b>DTE Energy Services</b> (DTEES) finished work on its construction project to convert a shuttered coal-fired power plant at the Port of Stockton, California, to operate on biomass fuel. The plant, known as Stockton Biomass, began commercial operations on Feb. 21. It is selling its renewable power to <b>PG&amp;E</b>. The plant will use about 320,000 tons of woody biomass fuel annually to generate about 45 MW of power. The fuel primarily is derived from urban wood waste, tree trimmings and agricultural processes. The plant began operation in 1989 as a coal-fired power plant and ceased operation in April 2009. DTEES purchased it in June 2010 with plans to convert the plant to biomass.</p>
<p><b>Duke Energy Renewables</b> acquired two 20-MW California solar projects from renewable energy developer <b>Infigen Energy</b>. The Pumpjack and Wildwood Solar Power Projects, located in Kern County near Bakersfield, represent Duke Energy Renewables' third and fourth utility-scale solar power projects in the state. The solar energy generated from the two projects will be sold through 20-year PPA with <b>Southern California Edison</b>.</p>
<p><b>GE </b>unveiled its 2.75-120 wind turbine, part of GE's "Brilliant" wind platform, which analyzes thousands of data points every second to help integrate operations with neighboring turbines, both to boost power output and to provide short-term predictable power through integrated energy storage. The 2.75-120 provides 5 percent more annual energy production than GE's 2.5-120 model and is available with various tower technologies, ranging between 85-139 meters, with energy storage as optional. The new turbine is available on a steel, hybrid or space frame tower. The range of tower height spans 85-139 meters tall.</p>
<h4><b>Generation</b></h4>
<p><b>ABB </b>won orders worth $45 million from Svenska kraftnät, the Swedish National Grid operator, to supply three 400-kV substation to strengthen the Swedish power grid. The substations are scheduled to be commissioned in 2015. ABB's project scope includes the design and supply of engineered packages for the high-voltage air-insulated switchgear (AIS) substations. Key products and systems to be supplied cover a range of high-voltage equipment, including a combined disconnector and circuit breaker (DCB).The DCB will integrate the disconnecting function into the circuit breaker and eliminates the need for two separate free-standing disconnectors. The substations will also be equipped with IEC 61850 based open control and protection systems and equipment.</p>
<p><b>Babcock &amp; Wilcox Nuclear Energy</b> (B&amp;W NE) was awarded a contract from <b>American Electric Power</b> (AEP) to provide steam generator services for the Donald C. Cook (D.C. Cook) Nuclear Plant just north of Bridgman, Mich. The D.C. Cook Plant contains two units, one of which is outfitted with Babcock &amp; Wilcox replacement recirculating steam generators. As part of this contract, B&amp;W NE will execute a comprehensive inspection and cleaning campaign, which includes eddy current testing, visual inspections, and water lancing. The inspections and cleaning activities are conducted periodically to monitor and maintain the condition of the steam generators.</p>
<h4><b>M&amp;A</b></h4>
<p><b>SunEdison</b> contributed and sold a portfolio of projects to SunEdison YieldCo, a newly formed yieldco vehicle wholly-owned by SunEdison. The initial capitalization of SunEdison YieldCo was financed with a $250 million facility extended by Goldman Sachs Bank USA, acting as sole lead arranger.</p>
<p><b>NRG Energy</b> entered into agreements with <b>Dominion Resources </b>to acquire its competitive retail electric marketing business. Once completed, the acquisition will support NRG's ongoing efforts to expand the company's competitive retail footprint in the Northeast and to grow its retail position in Texas.The transaction closed at the end of March.</p>
<p><b>A123 Systems</b> signed an agreement with <b>NEC Corporation </b>(NEC) of Japan to sell off its grid storage business and other assets related to energy storage for telecom and IT data storage applications. NEC acquired the A123 Energy Solutions for approximately $100 million. An agreement on the terms of the deal has been finalized and a new company, NEC Energy Solutions, is slated to begin operation in June 2014 under the direction of NEC. A123's existing cell manufacturing and sales, research and development, and automotive operations will remain the core focus of A123 Systems LLC.</p>
<p><b>NRG Energy</b> and <strong>Edison</strong> <b>Mission Energy </b>(EME) jointly announced that the <b>Federal Energy Regulatory Commission </b>(FERC) has approved the sale of substantially all of EME's assets to NRG. The acquisition of EME's portfolio of renewable and conventional generation assets will create the second-largest US power company. EME will add nearly 8,000 MW of generating capacity to the combined company's diverse portfolio of both conventional and wind generation facilities. The transaction closed on April 1, 2014.</p>
<p><b>NRG Energy</b> acquired <b>Roof Diagnostics Solar</b> (RDS), a residential solar company. Over the next month, the company will begin operating under the brand NRG Residential Solar Solutions. Terms of the transaction are not being disclosed.</p>
<p><b>Canadian Solar Solutions</b> completed the sale of Little Creek, an 8.5-MW solar power plant valued at over C$53.0 million ($47.95 USD), to a BluEarth Renewables subsidiary (BluEarth). This is the first of four planned solar projects being acquired by BluEarth from Canadian Solar, totaling 38.5 MW. The additional three utility-scale solar power plants being purchased by BluEarth, which are planned to reach commercial operation through Q2 2015, are located in Kawartha Lakes, Belleville and Beaverton, Ontario, Canada. Canadian Solar Solutions will provide turnkey EPC services for all four projects.</p>
<h4><b>Transmission</b></h4>
<p>The <b>Midcontinent Independent System Operator</b> (MISO) broke ground on a regional operations center in Little Rock, Ark. This action marks the next phase of the integration the entergy system's the four-state electric grid, which now comprises MISO's newly established southern region. Similar to the company's North Region Operations Center, the facility in Little Rock will serve as the command center for MISO's South Region. MISO expects to spend $22 million on its new facility in West Little Rock. The building is scheduled to be completed by the end of 2014.</p>
<p><b>Mon Power</b>, a subsidiary of <b>FirstEnergy</b>, installed new conductors on a 138-kV transmission line near Morgantown, W.Va., to handle future load growth in the Monongalia County area. The $5 million project includes three phases, with all the work occurring on existing rights-of-way. The transmission line upgrade is expected to be completed before year's end. Work is underway on the initial phase of the project which involves replacing about three miles of conductor on a transmission line between substations on Collins Ferry Road and Chaplin Hill Road in Morgantown. The next phase involves reconductoring about half a mile of transmission line and replacing six wooden structures between the substation located on Collins Ferry Road and another Morgantown substation on West Run Road. The work is scheduled to start in mid-April and be completed by early June. The final phase will be the installation of new conductor on six miles of existing transmission line between the substation on West Run Road and a substation adjacent to the Lake Lynn Power Station. Work is expected to start in July and be completed by the end of the year.</p>
<h4><b>Enterprise Software</b></h4>
<p><b>GE Energy Consulting</b> and the <b>New York Power Authority</b> (NYPA) have agreed to a one-year license arrangement allowing NYPA to use GE's Multi-Area Production Simulation (MAPS) software. NYPA is expanding its current modeling capabilities to perform high-fidelity nodal analysis. GE's MAPS software allows users to assess the value of a portfolio of generating units, identifies transmission constraints that impact the economic operation of the system and analyzes the complex interaction between the generation and transmission assets on the system.</p>
<h4><b>Metering</b></h4>
<p><b>Fleming-Mason Energy</b> (FME) selected <b>Tantalus</b> for the design and implementation of an AMI communications network in northeastern Kentucky. FME will also leverage TUNet - the Tantalus Utility Network - to support a wide range of integrated applications. FME is utilizing TUNet's hybrid RF mesh architecture which leverages an ultra-long range 220 MHz WAN backhaul in combination with a terrain hugging 900 MHz LAN. FME is also leveraging the use of remote disconnect/reconnect meters to assist in streamlining collections and improving customer service. Deployment is scheduled to be complete in December 2015.</p>
<p><b>Survalent Technology</b> commissioned an advanced distribution management system (ADMS) for <b>Lakeland Power Distribution</b>. The new system features Survalent's open-architecture system based on Windows Server. It includes Survalent's open system applications, including: SmartVU, SCADA explorer, event data recording, IED wizard &amp; control panel, SCADA add-in, remote alarm annunciation, DNP 3.0 scan task, connectivity import interface, AMI interface and ICCP master to master protocol. The system will include integration with a number of other enterprise systems such as ICCP connection with Hydro One, connectivity import connection with ESRI GIS and integration with the Elster AMI system to receive unsolicited outage message notifications.</p>
<h4><b>EVs &amp; Storage</b></h4>
<p><b>Toshiba</b> delivered battery energy storage systems integrating the company's SCiB, a lithium-ion secondary battery to Kyushu Electric Power, for a demonstration project to expand introduction of renewable energy sources on remote Japanese islands. The systems have been installed in substations on Tanegashima Island and Amamioshima Island, in Kagoshima prefecture. The demonstration program will run for three years to fiscal 2016. The maximum output and capacity of the systems Toshiba has delivered are 3,000kW and 1,161kWh for Tanegashima Island and 2,000kW and 774kWh for Amamioshima Island.</p>
<h4><b>Nuclear Energy</b></h4>
<p><b>Duke Energy Florida</b> sold 76 unused nuclear fuel assemblies from its retired Crystal River Nuclear Plant through a request for proposals (RFP) process. Federally licensed U.S. nuclear power plants and nuclear fuel fabricators are the only entities receiving Duke Energy Florida's RFP to buy the nuclear fuel assemblies. All proceeds from the sale of these assets will benefit Florida customers by reducing the amount of money Duke Energy Florida may recover from customers.</p>
<h4><b>Natural Gas</b></h4>
<p><b>Dominion</b> received word from the <b>Federal Energy Regulatory Commission</b> (FERC) that the agency will issue its environmental assessment for the Dominion Cove Point LNG liquefaction and export project on May 15. The proposed export facility will be located within the 131-acre footprint of the existing LNG import facility. No new pipelines, storage tanks or piers are needed at the facility. The company needs about 50 permits and approvals before construction can begin. Dominion filed notice for the pre-filing process with the FERC in June 2012 that it was planning to add export capability at its Cove Point terminal in Lusby, Md., in Calvert County on the western shore of the Chesapeake Bay. FERC has been researching and analyzing the application since then. Dominion filed the application in April 2013.</p>
<h4><b>Demand Response</b></h4>
<p><b>Honeywell</b> and <b>CPS Energy</b> (CPS) announced a two-year program whereby CPS will use automated demand response (ADR) technology and services from Honeywell. The program is expected to mark the largest ADR deployment by a municipal utility, and will build on a pilot project that CPS Energy and Honeywell completed last year. The completed pilot project had included nine commercial and industrial facilities, and has helped trim demand by approximately 1.5 MW. Honeywell and CPS Energy will look to enroll 60 additional sites, bringing the potential reduction to nearly 6 MW. Honeywell will also provide its Akuacom Demand Response Automation Server, software as a service (SaaS) that enables CPS Energy to send signals to building automation systems at sites enrolled in the program.</p>
<h4><b>Microgrids</b></h4>
<p><b>Canadian Solar</b> opened the new Canadian Solar Microgrid Testing Centre to focus on microgrid solution testing, system solution design and smart grid assessment services. The Canadian Solar Microgrid Testing Centre, partially funded by the Ontario Ministry of Energy, will be located in Guelph, Ontario and will work with its collaborators to provide shareable services for utilities, universities and colleges, communities, and companies that engage in the development of microgrid solutions.</p>
</div></div></div><div class="field field-name-field-article-category field-type-taxonomy-term-reference field-label-above clearfix"><h3 class="field-label">Category (Actual): </h3><ul class="links"><li class="taxonomy-term-reference-0"><a href="/article-categories/generation-markets">Generation &amp; Markets</a></li><li class="taxonomy-term-reference-1"><a href="/article-categories/td-grid">T&amp;D Grid</a></li><li class="taxonomy-term-reference-2"><a href="/article-categories/finance">Finance</a></li></ul></div><div class="field field-name-field-members-only field-type-list-boolean field-label-above"><div class="field-label">Viewable to All?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-article-featured field-type-list-boolean field-label-above"><div class="field-label">Is Featured?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-department field-type-taxonomy-term-reference field-label-above clearfix"><h3 class="field-label">Department: </h3><ul class="links"><li class="taxonomy-term-reference-0"><a href="/department/digest">Digest</a></li></ul></div><div class="field field-name-field-fortnightly-40 field-type-list-boolean field-label-above"><div class="field-label">Is Fortnightly 40?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-law-lawyers field-type-list-boolean field-label-above"><div class="field-label">Is Law &amp; Lawyers:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-above clearfix">
<div class="field-label">Tags:&nbsp;</div>
<div class="field-items">
<a href="/tags/sunedison">SunEdison</a><span class="pur_comma">, </span><a href="/tags/nationwide-mutual">Nationwide Mutual</a><span class="pur_comma">, </span><a href="/tags/arizona">Arizona</a><span class="pur_comma">, </span><a href="/tags/sol-systems">Sol Systems</a><span class="pur_comma">, </span><a href="/tags/minnesota">Minnesota</a><span class="pur_comma">, </span><a href="/tags/xcel-energy">Xcel Energy</a><span class="pur_comma">, </span><a href="/tags/federal-energy-regulatory-commission">Federal Energy Regulatory Commission</a><span class="pur_comma">, </span><a href="/tags/ferc">FERC</a><span class="pur_comma">, </span><a href="/tags/san-diego-gas-electric-0">San Diego Gas &amp; Electric</a><span class="pur_comma">, </span><a href="/tags/sdge">SDG&amp;E</a><span class="pur_comma">, </span><a href="/tags/sempra-us-gas-power-0">Sempra U.S. Gas &amp; Power</a><span class="pur_comma">, </span><a href="/tags/consolidated-edison">Consolidated Edison</a><span class="pur_comma">, </span><a href="/tags/first-solar">First Solar</a><span class="pur_comma">, </span><a href="/tags/dte-energy">DTE Energy</a><span class="pur_comma">, </span><a href="/tags/ge-energy-consulting">GE Energy Consulting</a><span class="pur_comma">, </span><a href="/tags/new-york">New York</a><span class="pur_comma">, </span><a href="/tags/pge">PG&amp;E</a><span class="pur_comma">, </span><a href="/tags/duke">Duke</a><span class="pur_comma">, </span><a href="/tags/ingigen">Ingigen</a><span class="pur_comma">, </span><a href="/tags/ge">GE</a><span class="pur_comma">, </span><a href="/tags/abb">ABB</a><span class="pur_comma">, </span><a href="/tags/babcock-wilcox">Babcock &amp; Wilcox</a><span class="pur_comma">, </span><a href="/tags/american-electric-power">American Electric Power</a><span class="pur_comma">, </span><a href="/tags/midcontinent-independent-system-operator">Midcontinent Independent System Operator</a><span class="pur_comma">, </span><a href="/tags/miso">MISO</a><span class="pur_comma">, </span><a href="/tags/mon-power">Mon Power</a><span class="pur_comma">, </span><a href="/tags/firstenergy">FirstEnergy</a><span class="pur_comma">, </span><a href="/tags/toshiba">Toshiba</a><span class="pur_comma">, </span><a href="/tags/nrg-energy">NRG Energy</a><span class="pur_comma">, </span><a href="/tags/dominion">Dominion</a><span class="pur_comma">, </span><a href="/tags/a123">A123</a><span class="pur_comma">, </span><a href="/tags/nec-corporation">NEC Corporation</a><span class="pur_comma">, </span><a href="/tags/edison-mission">Edison Mission</a><span class="pur_comma">, </span><a href="/tags/roof-diagnostics-solar">Roof Diagnostics Solar</a><span class="pur_comma">, </span><a href="/tags/canadian-solar-solutions">Canadian Solar Solutions</a><span class="pur_comma">, </span><a href="/tags/honeywell">Honeywell</a><span class="pur_comma">, </span><a href="/tags/cps-energy">CPS Energy</a><span class="pur_comma">, </span><a href="/tags/canadian-solar">Canadian Solar</a><span class="pur_comma">, </span><a href="/tags/fleming-mason">Fleming-Mason</a><span class="pur_comma">, </span><a href="/tags/tantalus">Tantalus</a><span class="pur_comma">, </span><a href="/tags/survalent">Survalent</a><span class="pur_comma">, </span><a href="/tags/lakeland-power-distribution">Lakeland Power Distribution</a> </div>
</div>
Mon, 28 Apr 2014 12:43:34 +0000meacott17175 at http://www.fortnightly.comUnwinding the Death Spiralhttp://www.fortnightly.com/fortnightly/2014/05/unwinding-death-spiral
<div class="field field-name-field-import-deck field-type-text-long field-label-inline clearfix"><div class="field-label">Deck:&nbsp;</div><div class="field-items"><div class="field-item even"><p class="p2"><span style="line-height: 1.538em;">Rooftop solar, net metering, and the perils of utilityspeak.</span></p>
</div></div></div><div class="field field-name-field-import-byline field-type-text-long field-label-inline clearfix"><div class="field-label">Byline:&nbsp;</div><div class="field-items"><div class="field-item even"><p>Bruce W. Radford</p>
</div></div></div><div class="field field-name-field-import-bio field-type-text-long field-label-inline clearfix"><div class="field-label">Author Bio:&nbsp;</div><div class="field-items"><div class="field-item even"><p><b>Bruce Radford</b> is temporary Editor of <i>Public Utilities Fortnightly</i>. Reach him at <a href="mailto:radford@pur.com">radford@pur.com</a>.</p>
</div></div></div><div class="field field-name-field-import-volume field-type-node-reference field-label-inline clearfix"><div class="field-label">Magazine Volume:&nbsp;</div><div class="field-items"><div class="field-item even">Fortnightly Magazine - May 2014</div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><p>If you're concerned about rooftop solar - how net metering and the falling cost of PV panels threatens the utility business model - you should get hold of the lastest issue of <i>Sierra</i>, the bimonthly magazine published by the Sierra Club, and spend a half-hour reading "Throwing Shade," by reporter Edward Humes, which describes how, "fearing lost profits, the nation's investor-owned utilities are moving to blot out the solar revolution." You'll find the time was well spent.</p>
<p>And like Pogo, the lead character in Walt Kelly's long-ago comic strip of the same name, you will realize that you have met the enemy, and "he is us."</p>
<p>There's nothing like learning from your critics. I don't need to tell you how utilities come off in the <i>Sierra</i> piece. But I will anyway. You're the evil empire. Listen as the author interviews ratepayers, on how they want to do right for Earth and pocketbook, but find themselves stymied by doublespeak about cost shifting, free riding, and grid integrity. Well let me tell you. For the average ratepayer, the grid is the enemy: "Why do I need it? What's it done for me? Why does it go down with every third snowfall or thunderstorm?"</p>
<p>In particular, I liked the discussion by the author about how certain studies treat the installation of rooftop solar as a "cost" that must somehow be overcome. Here's an example that illustrates the perils of going down that path:</p>
<p>"the study considered as a 'cost' not just the solar power that homeowners sell to the grid but also what they consume at home. (By that logic, installing home insualtion or even LED lightbulbs would be free-riding too.)"</p>
<p>Yes, I've read my share of rate cases. I know all about fixed-cost recovery, how utility rates include all sorts of purpose-specific charges: energy costs, transmission costs, capacity costs, customer costs. But let me tell you: all of that is a dead end. It doesn't resonate. Don't lay it on your customers. They won't buy it.</p>
<p>My suggestion? Take the high ground. Talk of grid reliability not as cost, but as insurance - as a customer benefit, one that you provide on principle, for the public good. Then take a page from Obamacare. Everyone in this country understands by now that we need strong enrollment from healthy millenials under the Affordable Care Act so that policy premiums will be sufficient to make possible the higher social good of making health insurance available to older, less healthy Americans, including those with pre-existing conditions. That analogy should hold as well for rooftop solar and net metering. To provide insurance for reliability, every ratepayer must stay "enrolled."</p>
<p>What you've really got to do is join hands with ratepayers. Take their side. Because, as the <i>Sierra</i> article so clearly shows, if you don't, you're toast.</p>
<h4>And now this ... RTO/ISOs for the gas industry?</h4>
<p>Last month, on April 1st, at the technical conference held at the Federal Energy Regulatory Commission in Washington, DC, to examine system operations and market performance last winter across the nation's six FERC-regulated regional power grids (PJM, MISO, SPP, CAISO, NY ISO and ISO New England), attorney Donald Sipe (PretiFlaherty) took to the podium, representing the American Forest and Paper Association, and wowed both audience and commissioners by suggesting that FERC consider opening a rulemaking (NOPR) to consider creating centralized regional natural gas markets, akin to the day-ahead power markets now in place at the six listed RTO/ISOs.</p>
<p>Here is what Sipe said, speaking entirely extemporaneously in his trademark, squeaky, Walter-Mitty-like voice:</p>
<p>"We want FERC to investigate and possibly order the implementation of an information and trading platform for natural gas that looks somewhat like the RTO trading platforms that you have for electricity, in the sense that you would have an operability region, you would take bids and offers for the sale of capacity and commodity both, you would have a central, if not a clearing mechanmism, then at least a central conformation mechamism, that would match offers on a short-term basis. You would do this across utility footprints. You would be able to match real-time needs on a more flexible basis, between what a generator is being asked to do and the supplies that are out there. This would have to respect the physical capability of the pipelines to accommodate that service."</p>
<p>Sipe was alluding to the many gas-electric coordination problems that have bedeviled the Northeast US over the past two winters. Gas-fired generators have been left without enough fuel to run, and system operators with barely enough reserves to ensure reliability without shedding load, owing primarily to competition for just-in-time fuel deliveries between heating load and gas-fired turbine generators that has exposed cracks in the nation's gas pipeline infrastructure. (For background, see <i>Fortnightly,</i> Commission Watch, "<a href="http://www.fortnightly.com/fortnightly/2013/04/no-fuel-no-power">No Fuel, No Power</a>," April 2013.)</p>
<p>Donald Sipe is as much philospher as lawyer. He retains a soft spot for the notion of serving the public interest. In debating FERC regulatory policy, and whether today's electricity markets can "empower" consumers, he's quick to take sides with Roosevelt's forgotten man. In a recent case, concerning ISO New England's recent push to impose performance penalties and rewards in its regional capacity market (see Op Ed, this issue, p. 8), Sipe mused on what factors might lead the poor to "choose" not to buy bread during a famine, or the elderly to "choose" not to buy electricity on the hottest or coldest days. Sipe questioned whether customer choice has any meaning for those lacking access to credit or substitute products.</p>
<p>Yet he remains a staunch advocate of markets. At the FERC conference, he played a trick on the audience. He said he would compare the two industries, gas and electric, and then ran through a litany of market imperfections - balancing requirements, fragmented and draconian nomination scheduling protocols, inflexible delivery and receipt points, a general lack of liquidity, and allocation of rights through flow orders rather than through an economic allocation via congestion management. And then he invited the audience to guess. Which industry was that? Everyone nodded. Of course, it must be gas. But no.</p>
<p>"Everyone knows what industry I'm talking about," Sipe crowed. "I'm talking about the electric industry of 25 years ago." But today, as he pointed out, electricity has entered the 21st century. Gas, meanwhile, is mired in the dark ages:</p>
<p>"Why do you need a four-hour nomination and confirmation process? Well, if it was automated, you wouldn't. ... You can't do things because you can't finacially settle as you can in the electric markets.</p>
<p>"This is not a physics problem. This is an information problem."</p>
<p>Can this really happen - an electric-style RTO/ISO market for gas? Commissioner Norris wanted to know:</p>
<p>"Not to put another April Fool on you," he smiled, yet that's just what he then did:</p>
<p>"Let's say we invited you all here to listen to Don's proposal, because actually what's really going to happen at the conclusion of this technical conference is that we have a proposed rulemaking ready to go out to set up a natural gas trading platform.</p>
<p>"You have one minute. Tell me why I should or should not vote for this NOPR to go out."</p>
</div></div></div><div class="field field-name-field-article-category field-type-taxonomy-term-reference field-label-above clearfix"><h3 class="field-label">Category (Actual): </h3><ul class="links"><li class="taxonomy-term-reference-0"><a href="/article-categories/renewables-solar-11505">Solar</a></li><li class="taxonomy-term-reference-1"><a href="/article-categories/customer-engagement">Customer Engagement</a></li><li class="taxonomy-term-reference-2"><a href="/article-categories/etrm-markets">ETRM &amp; Markets</a></li></ul></div><div class="field field-name-field-members-only field-type-list-boolean field-label-above"><div class="field-label">Viewable to All?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-article-featured field-type-list-boolean field-label-above"><div class="field-label">Is Featured?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-department field-type-taxonomy-term-reference field-label-above clearfix"><h3 class="field-label">Department: </h3><ul class="links"><li class="taxonomy-term-reference-0"><a href="/department/frontlines">Frontlines</a></li></ul></div><div class="field field-name-field-image-picture field-type-image field-label-above"><div class="field-label">Image Picture:&nbsp;</div><div class="field-items"><div class="field-item even"><img src="http://www.fortnightly.com/sites/default/files/1405-FR.jpg" width="800" height="533" alt="" /></div></div></div><div class="field field-name-field-fortnightly-40 field-type-list-boolean field-label-above"><div class="field-label">Is Fortnightly 40?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-law-lawyers field-type-list-boolean field-label-above"><div class="field-label">Is Law &amp; Lawyers:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-above clearfix">
<div class="field-label">Tags:&nbsp;</div>
<div class="field-items">
<a href="/tags/rooftop">rooftop</a><span class="pur_comma">, </span><a href="/tags/solar">Solar</a><span class="pur_comma">, </span><a href="/tags/net-metering">Net metering</a><span class="pur_comma">, </span><a href="/tags/sierra">Sierra</a><span class="pur_comma">, </span><a href="/tags/edward-humes">Edward Humes</a><span class="pur_comma">, </span><a href="/tags/pogo">Pogo</a><span class="pur_comma">, </span><a href="/tags/walt-kelly">Walt Kelly</a><span class="pur_comma">, </span><a href="/tags/cost-shifting">cost shifting</a><span class="pur_comma">, </span><a href="/tags/free-riding">free riding</a><span class="pur_comma">, </span><a href="/tags/grid-integrity">grid integrity</a><span class="pur_comma">, </span><a href="/tags/cost">Cost</a><span class="pur_comma">, </span><a href="/tags/energy">Energy</a><span class="pur_comma">, </span><a href="/tags/transmission">Transmission</a><span class="pur_comma">, </span><a href="/tags/capacity">capacity</a><span class="pur_comma">, </span><a href="/tags/customer">customer</a><span class="pur_comma">, </span><a href="/tags/reliability">Reliability</a><span class="pur_comma">, </span><a href="/tags/obamacare">Obamacare</a><span class="pur_comma">, </span><a href="/tags/federal-energy-regulatory-commission">Federal Energy Regulatory Commission</a><span class="pur_comma">, </span><a href="/tags/pjm">PJM</a><span class="pur_comma">, </span><a href="/tags/miso">MISO</a><span class="pur_comma">, </span><a href="/tags/spp">SPP</a><span class="pur_comma">, </span><a href="/tags/caiso">CAISO</a><span class="pur_comma">, </span><a href="/tags/ny-iso">NY ISO</a><span class="pur_comma">, </span><a href="/tags/iso-new-england">ISO New England</a><span class="pur_comma">, </span><a href="/tags/donald-sipe">Donald Sipe</a><span class="pur_comma">, </span><a href="/tags/pretiflaherty">PretiFlaherty</a><span class="pur_comma">, </span><a href="/tags/nopr">NOPR</a><span class="pur_comma">, </span><a href="/tags/trading-platform">trading platform</a><span class="pur_comma">, </span><a href="/tags/operability">operability</a><span class="pur_comma">, </span><a href="/tags/commodity">commodity</a><span class="pur_comma">, </span><a href="/tags/gas-fired">Gas-fired</a><span class="pur_comma">, </span><a href="/tags/just-time">just-in-time</a><span class="pur_comma">, </span><a href="/tags/fuel">fuel</a><span class="pur_comma">, </span><a href="/tags/roosevelt">Roosevelt</a><span class="pur_comma">, </span><a href="/tags/performance">performance</a><span class="pur_comma">, </span><a href="/tags/nomination">nomination</a><span class="pur_comma">, </span><a href="/tags/confirmation">confirmation</a> </div>
</div>
Mon, 28 Apr 2014 11:12:11 +0000meacott17168 at http://www.fortnightly.comInvoice Enclosedhttp://www.fortnightly.com/fortnightly/2014/03/invoice-enclosed
<div class="field field-name-field-import-deck field-type-text-long field-label-inline clearfix"><div class="field-label">Deck:&nbsp;</div><div class="field-items"><div class="field-item even"><p class="p1"><span style="line-height: 1.538em;">Having lost Entergy to MISO, the Southwest Power Pool seeks its pound of flesh.</span></p>
</div></div></div><div class="field field-name-field-import-byline field-type-text-long field-label-inline clearfix"><div class="field-label">Byline:&nbsp;</div><div class="field-items"><div class="field-item even"><p>Bruce W. Radford</p>
</div></div></div><div class="field field-name-field-import-bio field-type-text-long field-label-inline clearfix"><div class="field-label">Author Bio:&nbsp;</div><div class="field-items"><div class="field-item even"><p><span class="s1"><b>Bruce W. Radford</b></span> is publisher of <span class="s2"><i>Public Utilities Fortnightly</i></span>. Contact him at <a href="mailto:radford@pur.com">radford@pur.com</a>.</p>
</div></div></div><div class="field field-name-field-import-volume field-type-node-reference field-label-inline clearfix"><div class="field-label">Magazine Volume:&nbsp;</div><div class="field-items"><div class="field-item even">Fortnightly Magazine - March 2014</div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><p>Recently we witnessed history being made, but we don't know exactly when it happened.</p>
<p>It was January, certainly. Maybe the 10th, or maybe a day earlier.</p>
<p>That's when the Southwest Power Pool, in one of the most brazen moves yet seen in the power industry, dropped a single invoice in the mail: an invoice accompanied by a letter from its Chief Operating Officer Carl Monroe that, while perfectly cordial in tone ("Dear Richard," it begins), was sent nevertheless without a date affixed to it.</p>
<p>Was it the excitement of the moment? Very likely so, as this invoice surely marks a turning point for the power industry.</p>
<p>For it purports to bill MISO, the Midcontinent Independent System Operator, for some $2.4 million (including $1 million in penalties) that SPP claims are due and owing for the last two weeks of 2013, as compensation for uninvited, rogue power flows that it says MISO has loosed upon the SPP regional grid, as a consequence of Entergy's integration into the MISO footprint on December 19. Specifically, the six Entergy operating utilities - which SPP itself had once courted as potential members, before it was spurned - joined MISO and thereby formed what is now the nation's largest regional transmission organization, stretching from Manitoba all the way south to the Gulf of Mexico.</p>
<p>Welcome to the age of RTO competition: region vs. region, grid vs. grid. It could well outdo the choice wars between retail energy suppliers that we thought were in our future.</p>
<p>On January 30, in a second and separate invoice<i>,</i> SPP demanded another $6.9 million, covering that month's charges. No doubt we'll see more.</p>
<p>To understand the full intensity of this fight, let's turn to the parties themselves. Listen first to SPP, impugning MISO's daring reliance on its pitifully weak 1,000-MW physical tie to the Entergy system to achieve a market dispatch to serve Entergy's 27,000 MW of load - a gambit that SPP argues was known all along to be impossible, without the availability of additional physical transmission paths over SPP's lines, to catch and funnel the overflow:</p>
<p>"MISO's free, unlimited use of SPP's transmission system to serve the vast incremental load of the Entergy operating companies can no longer be found just, reasonable, and not unduly discriminatory... It makes no sense for all of the other users ... to have to pick up the tab." <i>(Complaint of Southwest Power Pool, pp. 6-7, FERC Dkt. EL14-21, filed Jan. 28, 2014.)</i></p>
<p>But now comes MISO, which, while not denying the existence of Entergy-bound power flows spreading across neighboring grids, has nevertheless rejected all attempts to bill for these affronts as <i>ultra vires:</i> unsupported in law or regulation, either by SPP's open-access transmission tariff (OATT), or by the Joint Operating Agreement (JOA) signed between the two RTOs, which was approved by the Federal Energy Regulatory Commission back in 2005. MISO says the JOA grants it a right to share SPP line capacity to complete its market dispatch of resources to the Entergy companies, as long as that sharing doesn't threaten SPP's reliability or firm schedules.</p>
<p>Listen, if you will, to MISO's reply to the SPP complaint:</p>
<p>"Now that the integration [of Entergy] has been successful, SPP seeks to charge MISO for point-to-point transmission service and unreserved use on the SPP transmission system ... even though there is no provision in the SPP Tariff or the JOA that permits such a charge.</p>
<p>"SPP is seeking to extract dollars from MISO customers to enrich its transmission owners." <i>(Answer of MISO, pp. 3-4, FERC Dkt. EL14-21, filed Feb. 18, 2014.)</i></p>
<p>But what of those caught in the middle?</p>
<p>Xcel Energy, which owns utility subsidiaries in both RTOs (Southwestern Public Service, in SPP, and Northern States Power, in MISO), rose quickly to the latter's defense:</p>
<p>"SPP variously characterizes the MISO market flows at issue as 'unfettered,' unilateral' or 'unlimited'... These assertions do not appear to be grounded in the facts."</p>
<p>TVA and the Southern Company, though not members of SPP, nevertheless fear that their grids, too, could become unintended hosts of MISO's power overflows. If compensation is due, they argue, it should be paid on unauthorized power overflows across all neighboring systems, and not just the SPP lines. <i>(Comments of the Joint Parties, p. 7, FERC Dkt. EL14-21 &amp; ER14-1174, filed Feb. 18, 2014.)</i></p>
<p>But Basin Electric Power Co-op., an SPP member, says it fully supports SPP's position that "it is simply wrong, contractually or otherwise, to grant MISO what essential amounts to a free ride on neighboring transmission systems."</p>
<p>FERC had ruled for MISO in 2011 <i>(136 FERC ¶61,010)</i>, interpreting JOA sec. 5.2 as granting permission to MISO to share the use of SPP lines to support the Entergy deal, and had denied rehearing in 2012 <i>(138 FERC ¶61,055)</i>. Then late last year (on December 3), the D.C. Circuit vacated FERC's ruling <i>(736 F.3d 994).</i> But in sending the case back to FERC to better explain how it arrived at its findings, the court itself expressed no opinion on the merits. That left the opposing parties as they were, in their original positions, before the appellate court had acted. MISO cites that fact as cause for FERC now to reject SPP's tendered invoices. Yet that confidence rests on tender hooks.</p>
<p>On February 18, in a factsheet provided to the energy trade press and others interested in the case, MISO provided a summary of its positions on issues raised in SPP's complaint, plus an overview of a dozen or more "frequently asked questions" in Q&amp;A format. Yet this effort only highlighted the fragility of MISO's position:</p>
<p>"<i>Question 9:</i> How will this cost be recovered if FERC sides with SPP?</p>
<p>"<i>Answer:</i> If FERC indicates it will rule in favor of SPP's interpretation, MISO will engage its stakeholders.</p>
<p>"<i>Question 10:</i> But, aren't you taking a risk with you [sic] stakeholders' money?</p>
<p>"<i>Answer:</i> We understand that some stakeholders have concerns about SPP's unauthorized bills to MISO and SPP's complaint against us. We take those concerns seriously."</p>
<p><b>Islands and Paths</b></p>
<p>This case turns on a single sentence in Section 5.2 of the MISO-SPP JOA: "If the Parties have contract paths to the same entity, the combined contract path capacity will be made available for use by both Parties."</p>
<p>As applied here, the "parties" are MISO and SPP. The "same entity" is Entergy, now a MISO member. SPP says this section authorizes either RTO to share in the use of the other's line capacity only as needed to reach "external third parties" - and not so that one RTO, in this case MISO, can use that appropriated capacity to serve its own load, Entergy.</p>
<p>SPP's Monroe highlights that fact his affidavit filed January 28 with SPP's complaint:</p>
<p>"I recall internal discussions at SPP about the language of section 5.2 ... [We] understood that 'contract paths' from MISO and SPP 'to other entities' was intended to describe the ability of either party to conduct point-to-point transmission transactions to and from third-party systems that were not a part of either MISO or SPP...</p>
<p>"We certainly had no idea that MISO ... would later claim that the provision could serve as the basis of allowing ... unreserved use of SPP's transmission capacity to operate a market including both MISO's existing system and a large new member like Entergy."</p>
<p>Yet, as MISO argues, either party's internal discussions shouldn't carry much weight in arriving at the correct interpretation of sec. 5.2. Of like mind is the Louisiana Public Service Commission. Siding with MISO, the PSC has protested the SPP complaint:</p>
<p>"SPP's beliefs are of little or no assistance if those beliefs are wrong.</p>
<p>"SPP does not allege that it communicated its understanding of the contract path language with MISO until this current dispute arose long after the JOA was negotiated, signed, and approved." <i>(Protest of La.PSC, p. 5, filed Feb. 18, 2014.)</i></p>
<p>The Louisiana commission also has been working hard to try to capture benefits for its local ratepayers from Entergy's sign-up with MISO. As an example, in January, in direct response to Entergy's integration into MISO, the state commission reformulated its methods for calculating avoided-cost rates for PURPA cogeneration QFs so as to reflect zonal or (in some cases) nodal clearing prices in the new MISO day-ahead market. The PSC wants to discourage "put" sales to local Louisiana utilities bound by PURPA with a QF purchase obligation, and instead to price all those transactions in the competitive day-ahead auction. <i>(See, La.PSC Order No. U-32628-A [corrected], issued Jan. 9, 2014.)</i></p>
<p>Much of the debate at FERC and at the appeals court focused on the words "contract path." In fact, the court of appeals vacated FERC's 2011 declaratory order on the meaning of sec. 5.2 partly because it found that FERC acted arbitrarily by refusing to entertain expert witness testimony on the general meaning that the power industry ascribes to the term "contract path."</p>
<p>SPP would define that term as "a designated path over which parties engage in point-to-point transmission service transactions," implying a scheduled interchange between different ("external") third-party balancing areas. SPP's definition thus would rule out MISO's market-based flows to Entergy, a MISO member, which would arise instantaneously in real time through a bid-based dispatch and encompass only a single transmission provider balancing area, denoting network service. As SPP argues, "network service has no identified contract path."</p>
<p>But MISO would have us go beyond dictionary definitions, to examine the regulatory history of why sec. 5.2 reads the way it does.</p>
<p>As MISO explains it, sec. 5.2 of the MISO-SPP JOA was drafted specifically to mimic a very similar provision in section 6.5 contained in the MISO-PJM JOA. According to MISO, FERC approved that provision in the MISO-PJM JOA to solve the problem of a partial "islanding" of MISO's Michigan and Wisconsin areas, which had become somewhat electrically isolated from the remainder of the then Midwest ISO after the erstwhile "Alliance" companies had sided with PJM, and after Commonwealth Edison had moved its Chicago-area grid to PJM's corner.</p>
<p>According to MISO, "the commission accepted the provision as proposed by the RTOs [MISO and PJM] and, in a subsequent order, confirmed the essential purpose of sec. 6.5 as ... "addressing the weak MISO contract path capacity between Wisconsin and Michigan and the rest of MISO." <i>(Answer of MISO, p. 20, FERC Dkt. EL14-21, filed Feb. 18, 2014.)</i></p>
<p>In other words, the "weak MISO contract path capacity" [FERC's words] between Wisconsin and Michigan and the rest of MISO would be addressed, as FERC explained, "by the sharing of the RTOs' combined contract path capacity in the JOA ... which will allow Wisconsin and Michigan utilities to access the RTOs combined capability under the Midwest ISO tariff." <i>(MISO Answer, quoting from FERC's 2004 decision, at 106 FERC ¶61,250, para. 63.)</i></p>
<p>This problem, concerning MISO's need to use PJM lines to reach partially islanded areas in Wisconsin and Michigan, seems directly analogous to MISO's present need to rely on SPP capacity to reach its almost-completely islanded Entergy territories.</p>
<p>According to MISO, FERC's 2004 order interpreting the JOA with PJM "is simply irreconcilable with the SPP's 'point-to-point' interpretation."</p>
<p><b>No Harm, No Foul</b></p>
<p>SPP vs. MISO raises multiple issues fundamental to the RTO world. For example, to underpin its demands for compensation, SPP has filed a new tariff with FERC, albeit unilateral, unsigned, and unexecuted as yet, containing a stated rate to be applied to these rogue MISO flows across the SPP grid. This new tariff is called the "MISO Service Agreement," and it's where the numbers on the invoices originated. SPP describes this new tariff as defining a rate for non-firm, point-to-point transmission service provided to MISO. <i>(See, SPP Tariff Filing, FERC Dkt. ER14-1174, filed Jan. 28, 2014.)</i></p>
<p>But there's a problem. As MISO has pointed out, when FERC reformed its pro forma OATT in Order 890, it stated clearly that RTO's can't be transmission customers. Rather, they are intended to be co-equals: each a transmission provider, and each independent of markets.</p>
<p>Says MISO: "Never before was an RTO made a transmission customer of another RTO.</p>
<p>"Such an arrangement has profound negative implications for the future of these organizations."</p>
<p>Another issue concerns loop flows - the incidental, unintentional overflows onto parallel paths that are inevitable under the laws of physics.</p>
<p>MISO argues that FERC always intended that RTOs resolve loop flows amicably, through JOA negotiations. In fact, in FERC Order 1000, governing regional transmission planning, the commission said its policy on loop flows implores caution "against the hasty submittal of ... unilateral filings and prefers resolution of parallel path flow issues on a consensual, regional basis."</p>
<p>SPP counters, however, that these MISO power overflows can't be classified as incidental, since any engineer should know you can't serve 27,000 MW of load through a 1,000-MW pipe. Thus, in SPP's view, FERC's policy on loop flows shouldn't apply, meaning that its hasty submittal of unilateral filings is perfectly proper.</p>
<p>But now we must get technical, delving into the RTO world of cross-border congestion management, including RCFs, or "reciprocal coordinated flowgates." MISO explains, describing the RTO-to-RTO congestion management process (CMP) and its more advanced cousin, the ICP, or interregional coordination process:</p>
<p>"The use of RCFs under the JOA allows the parties to maximize transmission system utilization by permitting reciprocal use up until congestion occurs, with the parties then returning to their allocation based on historic use.</p>
<p>"Available shared contract path capacity is efficiently used under normal operating conditions, but can be 'turned back' when congestion requires flow reductions to ensure that the owner of the capacity is able to serve its firm loads." <i>(See, MISO Answer, pp. 44-45, FERC Dkt. EL14-21, filed Feb. 18, 2014.)</i></p>
<p>In other words, no harm, no foul.</p>
<p>MISO maintains that the excess power flows it has placed on SPP's grid are simply making use of transmission capacity that's there for the taking, as the MISO flows won't be imposing any congestion on SPP's native load:</p>
<p>"If congestion develops on an SPP flowgate, MISO will reduce the impact of these flows ... if no congestion is present, these flows are tolerated in exchange for the benefits of networked interconnection.</p>
<p>"It is a quibble how the flows are described... SPP does not allege that it is unable to sell transmission service, or has experienced increased congestion ... suffered any other harm that would justify compensation or penalties." <i>(MISO Answer, pp. 47-48, FERC Dkt. EL14-21, filed Feb. 18, 2004.)</i></p>
<p>And that's Xcel's take as well:</p>
<p>"There is no suggestion in this case that the flows at issue are firm schedules serving firm loads that 'bump' SPP's firm use of its own system." <i>(Xcel comments, p. 8.)</i></p>
<p>But listen to the SPP transmission owners themselves, commenting on the dispute, who offer up some of the most remarkable prose ever found in a FERC proceeding:</p>
<p>"SPP's transmission system is not a fallow field awaiting planting from the first person willing to scatter some seeds."</p>
<p><b>Nosey Neighbors</b></p>
<p>Though it remains absolutely confident of the rightness of its cause, the Midcontinent ISO has taken the unusual step of answering SPP's complaint and invoices with a complaint of its own <i>(MISO v. SPP, FERC Dkt. EL14-30, filed Feb. 18, 2014),</i> in which it has warned that SPP's actions are "casting a financial cloud over the MISO markets."</p>
<p>That cloud concerns ORCA, the "Operations Reliability Coordination Agreement" proposed by MISO and OK'd by FERC last fall. Parties to the agreement include MISO, plus various neighboring utility systems other than SPP, known under ORCA as the "Joint Parties," that might also be affected by MISO's flows to Entergy, such as TVA and the Southern Company <i>(See, Dkt. ER13-2162, Oct. 10, 2013, 145 FERC ¶61,032.)</i></p>
<p>MISO now claims that it has received three "nearly identical letters," from three of the ORCA signatories - TVA, LG&amp;E-KU, and one very small utility, Associated Electric Co-op, Inc. (AECI), which has figured prominently in the Entergy integration.</p>
<p>AECI, which serves Missouri's "Boot Heel" district near earthquake-prone New Madrid, is the reason that MISO member Ameren maintains its 1,000-MW link to Entergy-Arkansas. According to MISO, in the letters the three utilities threaten to renege on their ORCA obligations to work with MISO to manage power flows to Entergy.</p>
<p>As MISO has explained, ORCA establishes an "operations transition period," during which time MISO will limit its directional market flows between the new MISO South Region (Entergy) and MISO Midwest, its prior historical footprint. North-to-South flows are defined as "negative"; South-to-North flows are "positive." OTP Phase 1 (ending April 2014) limits total net flows (positive minus negative) to 2,000 MW. Phases 2 and 3 retain that limit but add a few wrinkles, such as testing and validation of flow effects. But after OTP Phase 3 ends, on April 1, 2015, the 2,000-MW flow limit in ORCA falls away, allowing higher flows.</p>
<p>Nevertheless, those three nearly identical letters threaten to tear up the ORCA provisions. According to MISO, in spite of the ORCA limit of 2,000 MW, the letters from TVA, AECI, and LG&amp;E-KU demand that MISO limit its region-to-region flows to 1,000 MW, the capacity of the physical tie. TVA's letter, in fact, says it "reserves the right to charge MISO for any use of unreserved capacity on the TVA transmission system if MISO transfers exceed the 1,000-MW contract path limitation."</p>
<p>To MISO's eyes, these three joint parties have now sided with SPP. They base their demand, says MISO, on the idea that the D.C. Circuit order settled the case in favor of Southwest Power Pool, rather than simply sending the issue back to FERC.</p>
<p>On January 29, in a presentation to the ORCA Reliability Subcommittee, MISO had acknowledged that recent extreme cold conditions in the Northeast had given rise to an "unusual level of Northeast imports," resulting in large parallel flows across the TVA system, which might limit its ambitions to increase south-north and north-south flows.</p>
<p>But barring that, MISO suggested in that same presentation that once the ORCA limit expires, there ought to be an additional 4,800 to 5,400 MW of additional transfer capability between MISO-Midwest and MISO-South, on top of flows that are occurring now in compliance with the Phase 1 ORCA limit of 2,000 MW.</p>
<p>In other words, by spring of next year, SPP could be looking at MISO dispatch flows between its Midwest and Entergy regions totaling seven times the capacity of the actual physical tie.</p>
</div></div></div><div class="field field-name-field-article-category field-type-taxonomy-term-reference field-label-above clearfix"><h3 class="field-label">Category (Actual): </h3><ul class="links"><li class="taxonomy-term-reference-0"><a href="/article-categories/ferc">FERC</a></li><li class="taxonomy-term-reference-1"><a href="/article-categories/commission-watch">Commission Watch</a></li><li class="taxonomy-term-reference-2"><a href="/article-categories/etrm-markets">ETRM &amp; Markets</a></li><li class="taxonomy-term-reference-3"><a href="/article-categories/transmission">Transmission</a></li></ul></div><div class="field field-name-field-members-only field-type-list-boolean field-label-above"><div class="field-label">Viewable to All?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-article-featured field-type-list-boolean field-label-above"><div class="field-label">Is Featured?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-department field-type-taxonomy-term-reference field-label-above clearfix"><h3 class="field-label">Department: </h3><ul class="links"><li class="taxonomy-term-reference-0"><a href="/department/commission-watch">Commission Watch</a></li></ul></div><div class="field field-name-field-image-picture field-type-image field-label-above"><div class="field-label">Image Picture:&nbsp;</div><div class="field-items"><div class="field-item even"><img src="http://www.fortnightly.com/sites/default/files/1403-CW.jpg" width="360" height="180" alt="" /></div></div></div><div class="field field-name-field-fortnightly-40 field-type-list-boolean field-label-above"><div class="field-label">Is Fortnightly 40?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-law-lawyers field-type-list-boolean field-label-above"><div class="field-label">Is Law &amp; Lawyers:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-above clearfix">
<div class="field-label">Tags:&nbsp;</div>
<div class="field-items">
<a href="/tags/southwest-power-pool">Southwest Power Pool</a><span class="pur_comma">, </span><a href="/tags/miso">MISO</a><span class="pur_comma">, </span><a href="/tags/carl-monroe">Carl Monroe</a><span class="pur_comma">, </span><a href="/tags/midcontinent-independent-system-operator">Midcontinent Independent System Operator</a><span class="pur_comma">, </span><a href="/tags/sp-0">SP</a><span class="pur_comma">, </span><a href="/tags/entergy">Entergy</a><span class="pur_comma">, </span><a href="/tags/open-access-0">open-access</a><span class="pur_comma">, </span><a href="/tags/oatt">OATT</a><span class="pur_comma">, </span><a href="/tags/joa">JOA</a><span class="pur_comma">, </span><a href="/tags/federal-energy-regulatory-commission">Federal Energy Regulatory Commission</a><span class="pur_comma">, </span><a href="/tags/xcel-energy">Xcel Energy</a><span class="pur_comma">, </span><a href="/tags/tva">TVA</a><span class="pur_comma">, </span><a href="/tags/southern-company">Southern Company</a><span class="pur_comma">, </span><a href="/tags/basin-electric">Basin Electric</a><span class="pur_comma">, </span><a href="/tags/ferc">FERC</a><span class="pur_comma">, </span><a href="/tags/louisiana">Louisiana</a><span class="pur_comma">, </span><a href="/tags/network">Network</a><span class="pur_comma">, </span><a href="/tags/contract-path">contract path</a><span class="pur_comma">, </span><a href="/tags/wisconsin">Wisconsin</a><span class="pur_comma">, </span><a href="/tags/michigan">Michigan</a><span class="pur_comma">, </span><a href="/tags/rcp">RCP</a><span class="pur_comma">, </span><a href="/tags/reciprocal">reciprocal</a><span class="pur_comma">, </span><a href="/tags/flowgate">flowgate</a><span class="pur_comma">, </span><a href="/tags/congestion">Congestion</a><span class="pur_comma">, </span><a href="/tags/cmp">CMP</a><span class="pur_comma">, </span><a href="/tags/orca">ORCA</a><span class="pur_comma">, </span><a href="/tags/reliability">Reliability</a><span class="pur_comma">, </span><a href="/tags/coordinating">coordinating</a><span class="pur_comma">, </span><a href="/tags/lge-ku">LG&amp;E-KU</a><span class="pur_comma">, </span><a href="/tags/aeci">AECI</a> </div>
</div>
Mon, 03 Mar 2014 01:15:55 +0000meacott17070 at http://www.fortnightly.comLife in the Transco Agehttp://www.fortnightly.com/fortnightly/2014/03/life-transco-age
<div class="field field-name-field-import-deck field-type-text-long field-label-inline clearfix"><div class="field-label">Deck:&nbsp;</div><div class="field-items"><div class="field-item even"><p class="p1"><span style="line-height: 1.538em;">The competitive transmission genie is out of the bottle.</span></p>
</div></div></div><div class="field field-name-field-import-byline field-type-text-long field-label-inline clearfix"><div class="field-label">Byline:&nbsp;</div><div class="field-items"><div class="field-item even"><p>Elliot Roseman, Ken Collison, and Kiran Kumaraswamy</p>
</div></div></div><div class="field field-name-field-import-bio field-type-text-long field-label-inline clearfix"><div class="field-label">Author Bio:&nbsp;</div><div class="field-items"><div class="field-item even"><p><span class="s1"><b>Elliot Roseman</b></span> and <span class="s1"><b>Ken Collison</b></span> are vice presidents at ICF International. <span class="s1"><b>Kiran Kumaraswamy</b></span> is a senior manager at ICF.</p>
</div></div></div><div class="field field-name-field-import-volume field-type-node-reference field-label-inline clearfix"><div class="field-label">Magazine Volume:&nbsp;</div><div class="field-items"><div class="field-item even">Fortnightly Magazine - March 2014</div></div></div><div class="field field-name-field-import-image field-type-image field-label-above"><div class="field-label">Image:&nbsp;</div><div class="field-items"><div class="field-item even"><img src="http://www.fortnightly.com/sites/default/files/1403-BIZ-fig1.jpg" width="1356" height="917" alt="Figure 1 - Utilities Creating Merchant Transcos" title="Figure 1 - Utilities Creating Merchant Transcos" /></div><div class="field-item odd"><img src="http://www.fortnightly.com/sites/default/files/1403-BIZ-fig2.jpg" width="1352" height="753" alt="Figure 2 - PJM Artificial Island Proposal" title="Figure 2 - PJM Artificial Island Proposal" /></div><div class="field-item even"><img src="http://www.fortnightly.com/sites/default/files/1403-BIZ-fig3.jpg" width="1352" height="641" alt="Figure 3 - PJM 2013 Market Efficiency Proposal Respondents" title="Figure 3 - PJM 2013 Market Efficiency Proposal Respondents" /></div><div class="field-item odd"><img src="http://www.fortnightly.com/sites/default/files/1403-BIZ-fig4.jpg" width="1352" height="757" alt="Figure 4 - Structure and Bidders in CAISO Solicitations" title="Figure 4 - Structure and Bidders in CAISO Solicitations" /></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><p>The structure of the transmission industry is changing substantially, and will continue to do so for some time to come. With the advent of competition, there will be both legacy and new transmission players, with opportunities opening up for both progressive utilities and independent transmission companies alike.</p>
<p>How can we make such a statement? It's supported by strong precedent in power generation, as well as ongoing trends in the evolution of markets and business models.</p>
<p>Back in the late 1970s and early 1980s, the U.S. Congress heralded a revolutionary development, when it enacted the Public Utility Regulatory Policies Act (PURPA). For the first time, the law obligated utilities to purchase generation capacity and energy from others rather than only build it themselves. These new upstarts - qualifying facilities (QF) or so-called "PURPA machines" - had to meet strict efficiency and size criteria. For QFs that succeeded in being built and coming on line, utilities were required to provide interconnection service and to calculate and pay the utility's avoided cost for their entire output.</p>
<p>PURPA was the camel's nose under the tent. By the mid-1980s PURPA catalyzed a massive influx of offers from non-utility generators (NUG) to sell power to the utilities, to such an extent that some utilities couldn't absorb them all. Interconnection became a major issue. Some states adopted payment approaches (<i>e.g.,</i> New York's "6-cent law") that seriously cut into utility profits, and utility credit ratings began to suffer. There was talk of repealing PURPA, but it had solid political support.</p>
<p>What to do? Faced with barbarians at the gate, the utilities came up with a brilliant solution: make the NUGs compete, not with the utilities' cost, but with each other. They started to issue RFPs that identified their capacity needs, timing, and types of power required. Early on, through trial and error, utilities discovered that they needed to set threshold criteria for bids, such as requiring that they have features like a reliable fuel supply and a contracted site. Within just a few years, a number of states (<i>e.g.,</i> Massachusetts, Minnesota, Wisconsin, etc.) had adopted approaches to evaluate bids for capacity, and to accept only those that were deemed best using a complex array of criteria. Also, the utilities also figured out how to participate in their own solicitations, using independent evaluators or separating the evaluation from the bids. Using this approach, hundreds of thousands of megawatts were offered to utilities; tens of thousands of megawatts were selected; and most (but not all) of the selected projects signed contracts and were built; some failed to secure air permits or financing.</p>
<p>The Energy Policy Act of 1992 (EPAct) gave a whole new meaning to this competition by allowing independent power producers (IPP) that didn't meet PURPA's efficiency standards to compete head-to-head with utilities to supply baseload generation. At this point, utilities set up their own unregulated IPP affiliates to mirror the young upstarts and compete outside of their service territories. Examples included Southern California Edison (Mission Energy), Duke (Duke Energy North America), PG&amp;E (PG&amp;E-Bechtel, which later became U.S. Generating Co.), Xcel Energy (NRG Energy) and others. Some went overseas as well, mostly with disappointing results before they returned to the United States. The rest is history. Between RFPs for new generation and the conversion of rate-based generation to unregulated units, IPPs now make up 35 to 40 percent of all power generation and capacity in the U.S.</p>
<p>Fast forward again. FERC issued Order 1000 in July 2011, and this time, competition came to the transmission business instead of generation. This seminal Order - along with requirements in Order 890 - required all regions of the country (both traditional and organized) to develop or demonstrate an approach to transmission planning that included "non-transmission alternatives," (NTA), and eliminated the right of incumbency at the federal level by quashing the "right of first refusal." FERC Orders 890 and 1000, it seems, are the PURPA and the EPAct of transmission, as we are now seeing regional markets such as PJM, Midcontinent Independent System Operator (MISO), and California ISO (CAISO) adopt methods to allow competition to build and own transmission.</p>
<p>Just as no one thought that direct competition was possible for generation until PURPA, few thought it was possible for transmission until FERC Orders 890 and 1000. Also, decades of planning experience combined with these orders has shifted the focus from the individual utilities to the regions and RTOs, which also changes the location of where costs and benefits are assessed.</p>
<p>One hopes we've learned from our earlier experience. Rather than let a transmission tsunami wash over them with random offers to build and pay for new lines, the RTOs and ISOs are proactively organizing competitive processes to meet their reliability, economic, and public policy needs. They know from generation's hard experience that they need to qualify transmission bidders, based on both their prior experience and financial wherewithal.</p>
<p>Now the question is: what does competition for transmission portend for industry participants, and how could it change the game for regional entities, incumbent utilities, and their customers?</p>
<h4>Proving Transmission Needs</h4>
<p>As utilities and system operators prepare for the new landscape in transmission system procurement, they must contend with some issues that parallel those associated with the QFs and IPPs of the 1980s and 1990s, but they also must address a host of issues unique to transmission, and which bring with them significant technical and financial challenges. These relate to both the scale and complexity of these projects, as well as the specifics of power flow on the bulk power grid.</p>
<p>For example, because of the long lead times required to develop new transmission projects, it isn't unusual for system planners to initiate the process to meet reliability needs that are 10 or more years in the future. This presents a challenge, because ever-changing system supply and demand conditions and NTAs can lead to modified transmission project scope, extended timelines, project suspension, and even cancellation. For example, in 2012 PJM cancelled the Potomac Appalachian Transmission Highline (PATH) and the Mid-Atlantic Power Pathway (MAPP) because the recession, lower load growth, and demand response offers showed that they were no longer required to maintain grid reliability. These cancelled projects, valued at over $3 billion, were first proposed in 2007 and later approved by PJM in its system plan.</p>
<p>Transmission projects that are part of the emerging competitive solicitations, as described below, are subject to all of the same vagaries of the market and the resource planning process. Of course, the same factors affect power generation, but because of the shorter lead time and fewer permitting challenges, power plants are more likely to proceed than major transmission lines.</p>
<p>The process will further be complicated by the need to consider NTAs. Lessons from regions that already have similar requirements shows that this will introduce another layer of complexity and can change the scope of a proposed transmission project. In New England, a project proposed to meet a regional reliability need will be approved for construction only if it's shown that options such as NTAs can't solve the reliability problem and displace or defer the line. In Southern New England, National Grid and Northeast Utilities performed extensive studies to demonstrate that the New England East West Solutions (NEEWS) projects were preferred to NTAs. In Maine, the NTA analysis contributed to a change in scope from the transmission solution that was originally proposed as the Maine Power Reliability Program (MPRP).</p>
<p>In light of these challenges, it's clear that transmission procurement in a post-Order 1000 world will need to incorporate measures that account for changing system conditions and other development challenges that can defer if not eliminate the need for the project.</p>
<h4>Transco Models</h4>
<p>The new transmission environment ushered in by Order 1000 creates new challenges and opportunities for incumbents, other utilities, and independent transmission firms. For example, the order requires system operators to establish criteria that aren't unduly discriminatory for potential developers to demonstrate their capability to develop transmission facilities. Such a process, already being implemented by the PJM and California ISOs, will place incumbent utilities and interested transmission developers on equal footings to develop and own transmission projects. Similar to industries like telecom, opening the door to other market participants and encouraging competition is intended to create higher levels of efficiency, encourage innovation, and keep costs down.</p>
<p>Transmission-only and transmission-focused firms such as Trans-Elect, ITC, ATC, Anbaric, Pattern Energy, LS Power and others have been in the market for years, and with this boost from Order 1000, such transcos could have several advantages. For example, being part of an independent transmission company can eliminate the appearance of conflicts. In addition, transcos can: eliminate competition for capital from generation and distribution investment priorities; provide a singular staff focus on the challenges of transmission development; and create scale in all facets of such development (<i>e.g.,</i> permitting, financing, construction, etc.).</p>
<p>In line with such potential benefits, utilities like AEP, Exelon, Xcel, and Duke Energy have established transcos to pursue opportunities arising from Order 1000 and to expand their footprint beyond their regulated service territories (<i>see Figure 1</i>). In some cases, these transcos have a specific target area (<i>e.g.,</i> Xcel will be focused on developing transmission in Texas and New Mexico). Duke's venture with American Transmission Company, DATC, purchased 72 percent of the capacity on Path-15, a major transmission corridor from northern to southern California in April 2013. The company also is pursuing projects in the Midwest and Pacific Northwest.</p>
<p>As another example, in early 2013 utilities in New York created a one-of-a-kind proposal to establish a public-private transco to accelerate the investment of billions of dollars into the state's grid to replace aging infrastructure and fund system upgrades. This model for large-scale infrastructure investments underscores the financial prudence of rolling transmission assets into a separate entity for ease of regulatory treatment and access to capital markets. Although the deal didn't go through, ITC's move to purchase Entergy's transmission assets reflects a similar philosophy to promote investments in the region under a different ownership structure. At the same time, some such ventures have ended, such as when AEP and MidAmerican announced their plans in December 2012 to end their 50-50 partnership (Electric Transmission America) that successfully developed the Prairie Wind project in Kansas.</p>
<p>Overall, these examples illustrate that the business models for developing transmission are beginning to change to allow competition and growth in the new age launched by Order 1000. We expect that such restructuring will continue with other utilities and transmission owners across the country in the near future.</p>
<h4>Rising Competition</h4>
<p>Over the last six to nine months, utilities and system operators have conducted a handful of competitive solicitations, with substantial interest from transcos and independent developers, including international firms, to develop, build and own transmission lines. In the near-future we expect a continued high level of transco participation in such solicitations.</p>
<p>In April 2013, PJM issued one of the first of these solicitations to address technically challenging reliability concerns at an "artificial island" near the Salem and Hope Creek nuclear plants. This was an open solicitation that allowed bidders to determine how to respond to solve the reliability concern. In response to this solicitation, PJM received 26 proposals from seven entities that included three transcos - LS Power, Atlantic Wind, and Transource (<i>Figure 2</i>). The proposed solutions ranged widely in cost, from $100 million to $1.5 billion. PJM is evaluating the proposals with respect to cost and their effectiveness at addressing the reliability problem.</p>
<p>The second solicitation from PJM addressed market efficiency issues to provide relief for the top 25 congested facilities and interfaces in PJM, and solutions for interregional congestion issues. In response to this solicitation, six entities submitted 17 proposals with a range of projects including upgrades to existing facilities to provide congestion relief (<i>Figure 3</i>). Merchant companies submitted strong proposals, some of which scored well in the benefit-to-cost analysis that the technical committee of PJM performed late last year.<b><sup><a href="http://www.fortnightly.com/fortnightly/2014/03/life-transco-age?page=0%2C4#1" title="1. As an example, two of the proposals from LS Power passed the cost-benefit test, based on preliminary results presented at the PJM Transmission Expansion Advisory Committee Meeting, Dec. 11, 2013.">1</a></sup></b> This is an indication that the market is open to innovative solutions to address grid congestion as well as reliability challenges.</p>
<p>Outside of PJM, last year CAISO issued two requests for proposals related to reliability and renewable integration needs in their system. Both of these were closed RFPs, in that CAISO requested bids to build transmission from one point to another, with a specific voltage capacity, and with less opportunity for flexible responses than the PJM RFPs provided. The market responses to both these requests were considerable, as several merchant companies (including international firms such as Abengoa, Isolux Corsan, and Elecnor) joined the incumbent utilities and others to bid into the process to build, own and operate the transmission lines (<i>Figure 4</i>). The international companies have significant expertise in developing transmission assets globally and are trying to leverage such experience to penetrate the market in North America.</p>
<p>In the Gates to Gregg RFP, in November, 2013, CAISO selected the incumbent, PG&amp;E, along with its partners MidAmerican and Citizens Energy as the winner, showing the value of incumbency, particularly in closed solicitations.</p>
<h4>Innovation Benefits</h4>
<p>Following in the footsteps of generation in decades past, the competitive transmission genie is out of the bottle, and it's not going back in. Increasingly the industry will use competitive solicitations to develop transmission in the U.S., driven in no small measure by FERC Orders 890 and 1000. The response to solicitations in the PJM and California markets demonstrate a strong interest by transcos in competing with the incumbent utilities to develop and own transmission assets. Just as in the era of PURPA and EPAct, utilities are in the process of establishing subsidiaries to position themselves for emerging opportunities in new areas. Along with the influence of non-utility transcos, this competition likely will lead to creative solutions, efficiency gains, cost savings, and structural changes that will reshape the transmission landscape and benefit consumers from this point forward.</p>
<p>The extent to which customers get their wishes granted by this new genie remains to be seen, but if competitive dynamics and the evolving solicitation processes work, they will see real benefits from the invisible hand of the market.</p>
<h4>Endote:</h4>
<p><a name="1" id="1"></a>1. As an example, two of the proposals from LS Power passed the cost-benefit test, based on preliminary results presented at the PJM Transmission Expansion Advisory Committee Meeting, Dec. 11, 2013.</p>
</div></div></div><div class="field field-name-field-article-category field-type-taxonomy-term-reference field-label-above clearfix"><h3 class="field-label">Category (Actual): </h3><ul class="links"><li class="taxonomy-term-reference-0"><a href="/article-categories/ferc">FERC</a></li><li class="taxonomy-term-reference-1"><a href="/article-categories/etrm-markets">ETRM &amp; Markets</a></li><li class="taxonomy-term-reference-2"><a href="/article-categories/transmission">Transmission</a></li></ul></div><div class="field field-name-field-members-only field-type-list-boolean field-label-above"><div class="field-label">Viewable to All?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-article-featured field-type-list-boolean field-label-above"><div class="field-label">Is Featured?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-department field-type-taxonomy-term-reference field-label-above clearfix"><h3 class="field-label">Department: </h3><ul class="links"><li class="taxonomy-term-reference-0"><a href="/department/business-money">Business &amp; Money</a></li></ul></div><div class="field field-name-field-image-picture field-type-image field-label-above"><div class="field-label">Image Picture:&nbsp;</div><div class="field-items"><div class="field-item even"><img src="http://www.fortnightly.com/sites/default/files/1403-BIZ.jpg" width="1125" height="847" alt="" /></div></div></div><div class="field field-name-field-fortnightly-40 field-type-list-boolean field-label-above"><div class="field-label">Is Fortnightly 40?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-law-lawyers field-type-list-boolean field-label-above"><div class="field-label">Is Law &amp; Lawyers:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-above clearfix">
<div class="field-label">Tags:&nbsp;</div>
<div class="field-items">
<a href="/tags/transmission">Transmission</a><span class="pur_comma">, </span><a href="/tags/independent">independent</a><span class="pur_comma">, </span><a href="/tags/public-utility-regulatory-policies-act">Public Utility Regulatory Policies Act</a><span class="pur_comma">, </span><a href="/tags/purpa">PURPA</a><span class="pur_comma">, </span><a href="/tags/generation">generation</a><span class="pur_comma">, </span><a href="/tags/capacity">capacity</a><span class="pur_comma">, </span><a href="/tags/qualifying-facilities">Qualifying facilities</a><span class="pur_comma">, </span><a href="/tags/pf">PF</a><span class="pur_comma">, </span><a href="/tags/non-utility-generators">Non-utility generators</a><span class="pur_comma">, </span><a href="/tags/nug">NUG</a><span class="pur_comma">, </span><a href="/tags/threshold">threshold</a><span class="pur_comma">, </span><a href="/tags/criteria">criteria</a><span class="pur_comma">, </span><a href="/tags/energy-policy-act">Energy Policy Act</a><span class="pur_comma">, </span><a href="/tags/epact">EPAct</a><span class="pur_comma">, </span><a href="/tags/ipp">IPP</a><span class="pur_comma">, </span><a href="/tags/baseload">baseload</a><span class="pur_comma">, </span><a href="/tags/southern-california-edison">Southern California Edison</a><span class="pur_comma">, </span><a href="/tags/mission">Mission</a><span class="pur_comma">, </span><a href="/tags/duke">Duke</a><span class="pur_comma">, </span><a href="/tags/pge">PG&amp;E</a><span class="pur_comma">, </span><a href="/tags/bechtel">Bechtel</a><span class="pur_comma">, </span><a href="/tags/xcel">Xcel</a><span class="pur_comma">, </span><a href="/tags/nrg">NRG</a><span class="pur_comma">, </span><a href="/tags/ferc">FERC</a><span class="pur_comma">, </span><a href="/tags/order-1000">Order 1000</a><span class="pur_comma">, </span><a href="/tags/order-890">Order 890</a><span class="pur_comma">, </span><a href="/tags/non-transmission-alternatives">non-transmission alternatives</a><span class="pur_comma">, </span><a href="/tags/nta">NTA</a><span class="pur_comma">, </span><a href="/tags/incumbency">incumbency</a><span class="pur_comma">, </span><a href="/tags/icf">ICF</a><span class="pur_comma">, </span><a href="/tags/pjm">PJM</a><span class="pur_comma">, </span><a href="/tags/miso">MISO</a><span class="pur_comma">, </span><a href="/tags/caiso">CAISO</a><span class="pur_comma">, </span><a href="/tags/california">California</a><span class="pur_comma">, </span><a href="/tags/potomac">Potomac</a><span class="pur_comma">, </span><a href="/tags/appalachian">Appalachian</a><span class="pur_comma">, </span><a href="/tags/path">PATH</a><span class="pur_comma">, </span><a href="/tags/mid-atlantic">Mid-Atlantic</a><span class="pur_comma">, </span><a href="/tags/mapp">MAPP</a><span class="pur_comma">, </span><a href="/tags/market">market</a><span class="pur_comma">, </span><a href="/tags/resource-planning">Resource planning</a><span class="pur_comma">, </span><a href="/tags/reliability">Reliability</a><span class="pur_comma">, </span><a href="/tags/national-grid">National Grid</a><span class="pur_comma">, </span><a href="/tags/northeast-utilities">Northeast Utilities</a><span class="pur_comma">, </span><a href="/tags/neews">NEEWS</a><span class="pur_comma">, </span><a href="/tags/maine">Maine</a><span class="pur_comma">, </span><a href="/tags/mprp">MPRP</a><span class="pur_comma">, </span><a href="/tags/trans-elect">Trans-Elect</a><span class="pur_comma">, </span><a href="/tags/itc">ITC</a><span class="pur_comma">, </span><a href="/tags/atc">ATC</a><span class="pur_comma">, </span><a href="/tags/anbaric">Anbaric</a><span class="pur_comma">, </span><a href="/tags/pattern-energy">Pattern Energy</a><span class="pur_comma">, </span><a href="/tags/ls-power">LS Power</a><span class="pur_comma">, </span><a href="/tags/transco">Transco</a><span class="pur_comma">, </span><a href="/tags/aep">AEP</a><span class="pur_comma">, </span><a href="/tags/exelon">Exelon</a><span class="pur_comma">, </span><a href="/tags/datc">DATC</a><span class="pur_comma">, </span><a href="/tags/infrastructure">Infrastructure</a><span class="pur_comma">, </span><a href="/tags/entergy">Entergy</a><span class="pur_comma">, </span><a href="/tags/midamerican">MidAmerican</a><span class="pur_comma">, </span><a href="/tags/prairie-wind">Prairie Wind</a><span class="pur_comma">, </span><a href="/tags/salem">Salem</a><span class="pur_comma">, </span><a href="/tags/hope-creek">Hope Creek</a><span class="pur_comma">, </span><a href="/tags/atlantic-wind">Atlantic Wind</a><span class="pur_comma">, </span><a href="/tags/transource">Transource</a><span class="pur_comma">, </span><a href="/tags/market-efficiency">market efficiency</a><span class="pur_comma">, </span><a href="/tags/congestion">Congestion</a><span class="pur_comma">, </span><a href="/tags/abengoa">Abengoa</a><span class="pur_comma">, </span><a href="/tags/isolux-corsan">Isolux Corsan</a><span class="pur_comma">, </span><a href="/tags/elecnor">Elecnor</a><span class="pur_comma">, </span><a href="/tags/incumbent">incumbent</a><span class="pur_comma">, </span><a href="/tags/competitive">competitive</a> </div>
</div>
Mon, 03 Mar 2014 01:11:23 +0000meacott17068 at http://www.fortnightly.com